"This scent chills down my spine. I had real deja vu of 99 again because this whole thing's crumbling. All of the demand that trickles down to the trillions of dollars of CapEx and infrastructure is now basically down to demand being created by two players Anthropic and OpenAI but Meta have basically said: "oh we overestimated the front-end demand we could create so we're going to lease out our infrastructure" They're basically getting out early of these capex wars."

This sent chills down my spine I had real deja vu of 99 again because this whole thing's crumbling. All of the demand that trickles down to the trillions of dollars of CapEx and Infrastructure is now basically down to demand being created by two players, Anthropic and Open AI. But Meta basically said, "Oh, we overestimated the front end demand we could create, so we're going to lease out our infrastructure." They're basically getting out early of these CapEx Wars. They're going through the same cycle they went through with virtual reality. This all feels very 99 to me. We knew the internet was going to be huge, but the front end guys, the application layer, the pets.com, the amazon.com, it was clear that they weren't going to be able to create the kind of revenue in the short term that justified their valuations. So everyone thought, "Wait, let's go to B2B." So we went from Open AI to B2B and Anthropic, which was big in the enterprise, right? Then we found out there was companies like internet capital group, which was supposed to be a marketplace, so Pepsi could buy sugar, and then what everyone realized it was just total ****. And then they thought, "Well, hold on, okay, B2C and B2B, maybe we can't pick the winners, but the internet's huge. We need infrastructure investments, and they invested in Cisco." And then Cisco from 1990-2001 lost 92% of its market capitalization. And that sort of feels like what's happening here is the front end is stressed, it's not creating the demand originally anticipated. So we went from Open AI to Wait and Anthropic as B2B, that's where it's at. Now we're starting to see what is a token, nausea, people are saying you're spending too much in the enterprise on the ****, you need to scale it back. That's not to say these companies won't be great companies, it'll be around in 20 or 30 years. Amazon lost 90% of its value in a 24-month period, it's obviously recovered then, and the internet has lived up to the hype, but they went through incredible volatility. It's gone from what can AI do to will AI pay? And right now we're starting to see real cracks in the wall.