The Short Seller Who Called the Subprime Crisis Is Worried About AI — Is He Right This Time?

When Carson Block — the short seller who made his name calling out Chinese companies before they imploded — starts warning about AI, you can’t just dismiss it as sour grapes.

His core argument isn’t “AI is useless.” It’s that capital is flowing into AI infrastructure faster than it did into mortgage-backed securities before 2008. Companies are committing $100B+ to data centers and GPU clusters, with return timelines that are far longer than investors are pricing in.

As someone who’s shipped production AI systems, I feel this tension acutely.

OpenAI’s $852B post-money valuation is bigger than Disney and Nike combined. But how many AI companies actually have $10B in annual revenue? Almost none yet.

The dangerous parallel isn’t that AI will crash like houses did. It’s that GPU overinvestment could trigger a “local collapse” — specific companies or sectors that have no real business model, just investor momentum, could fall 90% overnight.

For everyday investors, the lesson is simple: not every AI company deserves its valuation. The risk of picking the wrong stock right now is way higher than missing the AI boat entirely.

The real danger isn’t the technology. It’s the price tag.