On the CUBE Pod: The AI ​​bubble lets some air out

The hustle and bustle of the New York Stock Exchange was heard on the CUBE Pod last Friday, and concerns about the artificial intelligence bubble grew.

Several technology companiesincluding Intel Corp., Alphabet Inc., Amazon.com Inc., CoreWeave Inc. and Fortinet Inc., saw their shares fall, suggesting investors may have doubts about overall AI infrastructure spending. At the same time, Anthropic PBC filed for an initial public offering with the U.S. Securities and Exchange Commission, in what should be a big debut for one of the biggest AI developers around (although the company still does not make a profit).

This also causes a stir the announcement that the NYSE parent companyIntercontinental Exchange (ICE), will partner with TradeXYZ to bring perpetual futures markets powered by cryptocurrency trading platform Hyperliquid to the US.

“The whole idea of ​​exchanges will change,” he said John Furrier (Pictured left), Executive Analyst at theCUBE Research. “It reminds me of cloud computing, how it has taken the data center to a new level. NYSE is the cathedral of capitalism. Nasdaq started as an over-the-counter bulletin board. Tech was there early and then only listed there. But now the game has changed. It will be very interesting to see how the competition between the NYSE and Nasdaq will develop.”

On the latest episode of theCUBE PodFurrier and Dave Vellante (right), principal analyst at theCUBE Research, discussed what Anthropic’s IPO and stock market jitters on Friday indicate a potential AI bubble. They also examined Intel’s missteps and the opportunities for full-stack infrastructure companies.

The AI ​​bubble releases some air

Last week, Google shares fell more than 12% after it reported a weak quarter for advertising and search revenue, presumably because chatbots distract people from the browser. Amazon also had a disappointing Friday, with its shares falling 7% as the company continues to trade Put money into building an AI infrastructure.

Despite investor concerns, Vellante believes the AI ​​bubble is deflating. He sees this as a good sign for the future of the AI ​​market.

“Think about the tulip bubbles in the 17th century,” Vellante said. “Think about the Japanese real estate bubble in the 1980s. And you think about the dot-com. That dot-com was actually different. Dot-com, they were all… overvalued. They led to massive valuations. But the dot-com actually performed well. It even exceeded expectations. And I think there are some things we can learn from that.”

Furrier sees signs of a positive growth cycle, starting with the cloud growth needed to support AI expansion. He also suggested that the infrastructure boom could coincide with the Neocloud cleanup as enterprise AI begins to create jobs instead of taking them away. Last week isn’t necessarily an indication that the AI ​​bubble is about to burst, he argues.

“Reason comes into play, common sense,” he said. “They’re starting to see the beginning of a transition. Wall Street is trying to figure it out. I don’t think they have it figured out yet. But if you look at the language of the pundits on the inside and how all the IPOs are positioned, the value of those IPOs – they want durability. This transition from the Silicon Valley tech ecosystem platforms is going to impact the markets. This is a platform play.”

Intel suffers setback

Intel shares saw their biggest decline last week, falling nearly 30%, after its earnings report on Thursday. The company has focused on CPUs instead of GPUs, which Vellante believes misses the mark. The actual game isn’t about CPUs versus GPUs, but about AI platforms. Still, he and Furrier expect Intel to make up some ground.

“Lip-Bu Tan and Intel have a chance,” Furrier said. “They’ve essentially lost the hyperscaler market that they once had a foothold in. Some clusters are still running x86. But they have to look at other footprints.

Intel is just one component in a rapidly changing ecosystem. While the AI ​​boom is comparable to the bubbles of yesteryear, theCUBE concluded that it is still a unique phenomenon that the market must grapple with and that will have an impact for decades.

“This is just a natural phase of adoption,” Vellante said. “What’s different is a lot of things. As you said, technology is suddenly deflationary. We’re trading capital spending for labor, and that hasn’t really kicked in yet. We’re seeing individual productivity gains, but that hasn’t shown up at the corporate level yet. These things just take time. And of course Wall Street says, Show me the money.”

Here is the full episode of this week’s theCUBE Pod:

Photo: SiliconANGLE