The AI bubble is about to pop... — Transcript

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1. 0:00Right now, Big Tech is burning billions  of dollars on machines they can’t plug in.
2. 0:04Silicon Valley promised AI would usher  in the next industrial revolution,
3. 0:08sparking a bitter and relentless race  to succeed. But they forgot one thing…
4. 0:13The power grid is maxed out. Now, state of the art data centers,
5. 0:17full of next gen chips, are sitting in the dark. Big Tech tried to build the future…
6. 0:22but built a multi-billion dollar graveyard. Ashburn, Virginia is ground zero for the AI
7. 0:27crisis. Nearly 50 million square feet (4.65  million square meters) of data center space
8. 0:31is crammed into this single county. Over 70% of  the world’s internet traffic flows through here
9. 0:36every day. To anyone passing by, they look like  thriving hubs, a testament to the digital age.
10. 0:41But inside, they’re hollow monuments. AI companies are being held hostage
11. 0:46by one local power company, Dominion  Energy, who recently dropped a bombshell.
12. 0:51The grid is paralyzed. In 2022, the wait time  to get a new data center online was 4 years.
13. 0:57By 2026, it had stretched to 7. Now, tech giants like Microsoft are being quoted
14. 1:02up to 12 years just to evaluate a connection  request. Not to lay down the copper or build a
15. 1:08substation. Just to decide if it is even possible. Dominion’s grid has a 25 gigawatt ceiling, enough
16. 1:15to power millions of homes across the region.  The data centers waiting in line are demanding 40
17. 1:21gigawatts. That’s the same output as 30 nuclear  reactors, all for a small corner of Virginia.
18. 1:27But the blackout isn’t contained  to this one part of America.
19. 1:30It’s spreading like a virus. Across the country, $130 billion
20. 1:34of real estate is sitting in limbo. And it’s causing a financial blackhole.
21. 1:39Nvidia rolls out a new chip every 18 to 24 months.  Each new generation makes the last one obsolete,
22. 1:45slashing its resale value in half. By the end of  the decade, a $30,000 chip bought in 2024 will be
23. 1:51worth the same as a used car engine block. And data centers are full of them.
24. 1:56Billions of dollars of silicon are sitting on  pallets in a dark warehouse, slowly bleeding
25. 2:01value, waiting for a substation that isn’t coming. Every CEO in Silicon Valley already knows this.
26. 2:07But they’re ordering more chips anyway because  if one of them blinks, their rivals race ahead.
27. 2:12If Amazon stops buying chips and Google’s  dark buildings light up the next day,
28. 2:17Amazon never catches up. It’s a Mexican standoff,  and each of these companies is terrified.
29. 2:22And America is caught in the crossfire.
30. 2:24Mark Zuckerberg has proved he’d  rather burn billions of dollars
31. 2:28than come second in the AI arms race. He  pushed Meta’s spending for 2026 to $145 billion
32. 2:35and it sent shockwaves through Wall Street.  Investors couldn’t see how Meta would ever earn
33. 2:40that money back, so they immediately dumped their  stock. $175 billion was wiped out in a single day.
34. 2:47Zuckerberg didn’t even blink.
35. 2:50Just 3 weeks later, he slashed 8,000  jobs… all to keep the spending alive.
36. 2:54Over at Microsoft, CEO Satya Nadella is  gambling even bigger. In a single quarter,
37. 2:59Microsoft poured a record $37.5 billion into AI  and data centers. That’s more than $400 million
38. 3:07every day. As finance chief, Amy Hood, warned that  AI demand is rapidly outpacing supply, investors
39. 3:13turned their backs. By the end of the next  day, $357 billion in value had been wiped out.
40. 3:19Nadella has even admitted that Microsoft has chips  sitting in storage with nowhere to plug them in.
41. 3:25But it hasn’t stopped him  from buying up more land.
42. 3:28Microsoft has signed $329 billion in leases  for data centers that haven’t even opened.
43. 3:34Some of them are locked in for 20 years.  And if the AI boom goes bust tomorrow,
44. 3:38Microsoft still has to pay every cent.
45. 3:41And those billions are all riding  on one vital piece of hardware.
46. 3:44A large power transformer.
47. 3:47These electrical monoliths can weigh as much  as an empty Boeing 747 and nobody can build
48. 3:52them fast enough. If Elon Musk or Zuckerberg  orders one today, it won’t arrive for another
49. 3:572 and a half years. By the time a building  goes live, every chip inside is obsolete.
50. 4:03Transformer prices have skyrocketed 77%  since 2019. Utilities pay it anyway, yet
51. 4:09America is still short 3 out of every 10 it needs.  Skilled crews have to build them one at a time,
52. 4:15around a core of specialized steel. And only one  place in the entire country can make that steel.
53. 4:21Butler, Pennsylvania.
54. 4:23The multi-million dollar AI industry is  leaning its full weight on a town of 13,000.
55. 4:28And the town’s mill has become a focal point for  the entire AI boom. And they're doing it on their
56. 4:34own. Transformer makers aren’t convinced the AI  demand will last. Not one of them wants to get
57. 4:39stuck with a massive factory and no orders. Even  the companies supplying the boom don’t trust it.
58. 4:44So America turned elsewhere.
59. 4:46Today, 80% of the country’s  biggest transformers are imported.
60. 4:50Countries all over the world are  fighting for the same hardware.
61. 4:53The richest companies on Earth are going  head to head with entire governments.
62. 4:57And there’s no cutting in line.
63. 4:59It doesn’t matter if you’re Amazon  or Google. The billion-dollar data
64. 5:03center in Ashburn is on the exact same  waiting list as the local substation.
65. 5:07It’s a trillion-dollar industry, stuck  behind a blown neighborhood fuze.
66. 5:11It’s a problem Big Tech  can’t buy their way out of.
67. 5:14But while companies like Microsoft and Meta take  all the risk, one company takes all the cash.
68. 5:20Jensen Huang, the CEO of Nvidia, is the  ultimate arms dealer in this Mexican standoff.
69. 5:25He gets paid the moment the  shipping crates leave his warehouse.
70. 5:28A single rack of Nvidia’s latest chips pulls  as much power as about 100 American homes.
71. 5:33Whether the grid survives  is somebody else’s problem.
72. 5:36Now, one state is being pushed to breaking point.
73. 5:39Energy demand is exploding in Texas. AI projects  currently waiting to be plugged in are demanding
74. 5:44a massive 474 gigawatts. That’s more than 5  times the record peak of the entire Texas grid,
75. 5:52and data centers make up  almost all of those requests.
76. 5:55The crisis has become so  urgent that in August 2026,
77. 5:59Texas Governor Greg Abbott, ordered an  emergency freeze on new data centers.
78. 6:03According to him, AI’s unquenchable thirst  for power could threaten the entire state.
79. 6:08ERCOT, the group responsible for  keeping the lights on in Texas,
80. 6:11issued a stark warning. They said that without  a full grid overhaul, the Permian Basin,
81. 6:16America’s biggest oil field, could face rolling  blackouts just to keep up with AI demands.
82. 6:21Desperate to survive, AI companies  are trying to find a workaround.
83. 6:25They’re trying to skip the grid altogether  by building their own gas plants on site.
84. 6:29Each of those plants needs a giant gas turbine,  and GE Vernova, America’s biggest turbine maker,
85. 6:36decides who gets one. And they have a  waiting list all the way through to 2030.
86. 6:41Now the tech giants are scrambling for scraps.
87. 6:44Every turbine they manage to secure, leaves  Texas more exposed to the next blackout.
88. 6:48Taxpayers had put up billions  to build new power plants
89. 6:51to act as a safety net for the public  grid. Instead, 8 of the state’s chosen
90. 6:55energy projects have walked away after being  ruthlessly squeezed out by the AI industry.
91. 7:00Even with its own power plant, a data center  stays dark until electricians wire it in.
92. 7:06And that’s the one thing that  can’t be ordered from a factory.
93. 7:09America is facing a catastrophic trade shortage.  Almost 20,000 electricians leave the industry
94. 7:14every year. And out of the ones who stay, 3 in 10  are over 50. It’s an industry that’s in decline.
95. 7:21And AI companies want the best talent,  so they’re making obscene offers.
96. 7:25On some data center jobs, electricians  can pull in up to $260,000 a year.
97. 7:30That means a skilled worker with a toolbelt  can easily outearn a software engineer.
98. 7:35No local contractor can come close to matching  that. In Abilene, Texas, OpenAI’s $500 billion
99. 7:40Stargate project pays electricians almost  double what local home builders can afford.
100. 7:45And with 100 more data centers headed for Texas,  the raid on local crews is just getting started.
101. 7:51These battles for resources might  play out one town at a time,
102. 7:55but the financial fallout is felt all over.
103. 7:5765 million Americans get their power from PJM  Interconnection. It’s the largest grid in America,
104. 8:04stretching across 13 states and Washington,  D.C., with Ashburn wedged into its heart.
105. 8:09Every year, PJM runs an auction that pays power  plants just to stand for any sudden surges.
106. 8:15And every household on the grid covers  that cost through its monthly bill.
107. 8:19For years, the system was stable.
108. 8:21Then the AI companies forced their way in  and began devouring every spare megawatt.
109. 8:26In one auction, the price shot up more than  6 times. Utilities are passing those costs
110. 8:31on to customers and those bills are landing  in mailboxes right now. Across the region,
111. 8:36households are paying an estimated $25 to  $30 more a month than they did in 2024,
112. 8:42according to the research firm SemiAnalysis.
113. 8:44Joseph Bowring, the independent  watchdog who polices PJM’s market,
114. 8:48traced the new costs straight to Big Tech.
115. 8:51Data centers, he wrote, are the primary reason  for the soaring prices. By his count, data centers
116. 8:56have already added $29.4 billion to customers’  costs and to him, the damage is “not reversible.”
117. 9:03The market is completely broken.
118. 9:05And everyday, families across America are paying  for buildings that won’t switch on for years.
119. 9:10The White House has demanded that new power plants  are built and brought online as soon as possible.
120. 9:15And they want the AI companies to pay for  them. One governor threatened to pull his
121. 9:19entire state out of PJM if the utility company  didn’t do something about the unfolding crisis.
122. 9:25Big Tech treated it like an empty threat.
123. 9:27Only one thing matters to them:  keeping their stock prices high.
124. 9:31As Wall Street continues to pump money into  the AI bubble, one man refuses to buy the hype.
125. 9:37Michael Burry, the legendary hedge fund  manager who called the 2008 housing crash,.
126. 9:42Now he’s combing through the AI  financial statements, line by line.
127. 9:46And just uncovered a billion dollar illusion.
128. 9:49In the summer of 2026, Nvidia began shipping its  next generation chip, Vera Rubin. The moment they
129. 9:55left the factory, the chips sitting in warehouses  across America fell a full generation behind.
130. 10:00But Microsoft and Google couldn’t let Wall Street  see the bleeding. So, they just altered a line in
131. 10:05their financial filings. They extended the life  of their AI servers from 4 years to 6 years.
132. 10:11With the stroke of a pen, they pushed billions  in costs further down the road. Overnight,
133. 10:16operation expenses disappeared and profits  artificially swelled. Meta pulled the exact
134. 10:21same stunt, instantly padding its profits by  $2.6 billion without selling a single extra ad.
135. 10:28Then Amazon’s own filings exposed the scam.
136. 10:31It had already stretched its own servers’  lives twice, padding its profits by more than
137. 10:35$5 billion. But in 2025, it suddenly reversed  course and cut some servers back to 5 years
138. 10:42and admitted the reason: artificial  intelligence is making hardware obsolete
139. 10:46faster than expected. Coming clean and telling  the truth cost Amazon about $1 billion in profit.
140. 10:52Michael Burry estimates that  Big Tech will hide $176 billion
141. 10:56in costs using this trick. He calls it “one  of the more common frauds of the modern era.”
142. 11:01Nvidia immediately fired back with a defensive  7-page memo to Wall Street analysts, desperate
143. 11:07to claim its chips stay useful for up to 6 years.  But Burry isn’t backing down. He’s now warning
144. 11:12that Oracle’s profits will soon be overstated by  more than a quarter, and Meta’s by about a fifth.
145. 11:18The deception goes even deeper.
146. 11:20Some of the biggest debts in the AI  boom are being wiped from the books.
147. 11:23Take Hyperion, the giant data center  Meta is building in rural Louisiana.
148. 11:28Mark Zuckerberg once posted its  outline laid over a map of Manhattan,
149. 11:32covering a big chunk of the island.  Meta needed $27 billion to build it.
150. 11:37But if Meta borrowed that $27 billion  itself, its stock price would tank.
151. 11:42So they engineered a loophole. They let  an investment firm called Blue Owl own the
152. 11:46majority of the project, then agreed to rent it  back. The debt stays off Meta’s balance sheet,
153. 11:52hidden from investors, while Wall Street unloads  the risky bonds onto public pension funds.
154. 11:57Across the biggest spenders, Burry counts  upward of $3 trillion in promises like this,
155. 12:02more than Canada’s entire  economy produces in a year.
156. 12:06And the borrowing they can’t hide is exploding.
157. 12:09The industry giants are burning through  cash so fast, lenders are demanding over
158. 12:137% interest just to hand it over. If the  giants are straining, the AI upstarts are
159. 12:19running dry. But Nvidia and Jenson Huang  have a plan to keep chip orders flowing.
160. 12:23They’re bankrolling their own customers.
161. 12:26Nvidia has already sunk $30 billion into OpenAI  and guaranteed up to $105 billion of the company’s
162. 12:32data center leases. If OpenAI defaults, Nvidia  pays every cent. And Huang is making those
163. 12:37promises to a company that’s hemorrhaging money,  losing $3 for every dollar it brought in in 2025.
164. 12:44Nvidia also owns a $4.7 billion stake in  chip rental company CoreWeave. Nvidia sells
165. 12:50the chips to CoreWeave, and whatever computing  power CoreWeave can’t sell, Nvidia buys back.
166. 12:55Jenson Huang is sitting on  both sides of the table.
167. 12:58Nvidia now has well over $100 billion tied  up in its own customers. Much of that money
168. 13:03circles straight back as chip orders and  Wall Street counts every one as growth.
169. 13:07But the cracks are starting to show.
170. 13:09Oracle founder Larry Ellison borrowed tens  of billions to build OpenAI’s data centers.
171. 13:13The reckless bet briefly made  him the richest man alive.
172. 13:17Now half of Oracle’s future orders hang on  a company that has never turned a profit.
173. 13:21The panic has already started.
174. 13:23Oracle and OpenAI abruptly pulled the  plug on a planned expansion in Abilene,
175. 13:28the same Texas campus that raided  local builders for electricians.
176. 13:31Wall Street turned on Ellison instantly.
177. 13:34The ratings agency S&P cut Oracle’s  credit rating to one step above junk,
178. 13:39while banks are holding billions of  toxic Oracle loans they can’t sell.
179. 13:43And now, millions of ordinary Americans  are caught in the firing line.
180. 13:47And their life savings are at risk. The investment giant PIMCO scooped up
181. 13:51about $18 billion of Meta’s Hyperion bonds, using  retirement money of millions to fund the deal.
182. 13:57If your pension is one of them, your future is  propping up a half built data center in Louisiana.
183. 14:02Those bonds run until 2049. But Meta’s first  lease on the building only lasts 4 years.
184. 14:08After that, Mark Zuckerberg can walk away,  leaving ordinary Americans holding the bag.
185. 14:13And you don’t get a say in it.
186. 14:15To raise the $800 billion to fund  the next set of data centers,
187. 14:18Wall Street went hunting for cash.  And they found it in insurance funds.
188. 14:22Firms like Apollo and KKR  bought up entire insurers,
189. 14:26the ones that sell the annuities retirees  count on for a monthly check. Since 2017,
190. 14:31buyout-owned insurers have quadrupled the amount  of money going into these data centers. But this
191. 14:36private credit market is already buckling.  Defaults have hit the highest rate on record.
192. 14:41At Blue Owl, the firm controlling most of  Hyperion, the stampede has already begun.
193. 14:45Investors in its tech lending fund tried  to pull out almost 40% of their money,
194. 14:50two quarters in a row. Blue Owl shut it  down and only released a small amount.
195. 14:54None of that has stopped Jensen Huang.
196. 14:56Nvidia has teamed up with Apollo,
197. 14:59KKR and 4 other Wall Street firms to raise  more than $500 billion for its own customers.
198. 15:05Once again, most of that money will be  drained from insurance and retirement funds.
199. 15:09If this sounds like unprecedented  tech innovation, it’s not.
200. 15:13It’s history repeating itself.
201. 15:15In the 1840’s, Britain got swept up in “Railway  Mania”. Building railway tracks soaked up about
202. 15:217% of the economy, the equivalent of  $2 trillion a year in today’s money.
203. 15:26The man taking their money was George Hudson,
204. 15:28dubbed the “Railway King.” At one point, Hudson  controlled over a quarter of England’s rail lines
205. 15:33and used his seat in Parliament to make  sure creditors couldn’t arrest him.
206. 15:37He ran his empire like a pyramid scheme. He  paid shareholders fat dividends out of their
207. 15:42invested capital and dressed it up as profit. The  payouts lasted only while fresh cash poured in.
208. 15:48Hudson’s scheme eventually came crashing down and  railway stocks across Britain lost two-thirds of
209. 15:53their value. A third of the approved lines were  never built. Families on modest incomes had sunk
210. 15:59their entire savings into railway shares and lost  everything. Once he lost his seat in Parliament,
211. 16:04Hudson fled the country. But justice eventually  caught up with him and he was imprisoned.
212. 16:09150 years later, Wall Street  was the one on the hook.
213. 16:13In the late 1990s, techcom giant, WorldCom
214. 16:16fed Wall Street a wildly inflated  story about internet growth.
215. 16:20The industry swallowed it whole and  borrowed close to $1 trillion to tear
216. 16:24up highway shoulders and railroad beds and  bury fiber-optic cable from coast to coast.
217. 16:28By some estimates, as much as 95% of it sat  dark, just like the data centers in Ashburn.
218. 16:34Gary Winnick, founder of the undersea  cable company Global Crossing,
219. 16:38saw the writing on the wall. Before the  company imploded under $12.4 billion in debt,
220. 16:43he cashed out more than $700 million in stock.
221. 16:46His workers never had that option. In Rochester,  New York, their 401k contributions came in company
222. 16:52stock they were banned from selling for 5 years.  The collapse wiped them out. Winnick held on to
223. 16:58his $94 million mansion in Bel Air, while his  staff recovered only a fraction of their losses.
224. 17:04WorldCom crashed even harder, triggering the  largest bankruptcy America had ever seen.
225. 17:09Its executives had disguised billions in  everyday costs as long-term investments,
226. 17:14pushing expenses into the future to prop up  profits today. The exact same accounting fraud
227. 17:19Michael Burry is accusing the AI companies  of in order to hide $176 billion in losses.
228. 17:25Inside WorldCom, employees watched $642  million in retirement savings shrink to
229. 17:31less than $19 million. A federal judge sent  CEO Bernie Ebbers to prison for 25 years.
230. 17:36Half a million telecom workers lost  their jobs. Investors lost trillions.
231. 17:41But dark fiber could sit in the ground for  years and still carry the internet one day.
232. 17:46The chips rotting inside empty data centers  can’t wait that long. With every new launch,
233. 17:51Jensen Huang wipes out billions in silicon.
234. 17:53WorldCom’s fraud gutted the  savings of its own workers.
235. 17:57Big Tech’s stock is buried in the 401(k)s of 70  million Americans. It adds up to $10.8 trillion,
236. 18:03more than a third of the U.S. economy. Out  of every $100 in a standard S&P 500 fund,
237. 18:09about $34 rides on just 7 tech giants,  with Nvidia the heaviest of them all.
238. 18:15If they fall, those accounts fall with them.
239. 18:18On June 5th, 2026, the market got its first  warning shot. In a single trading session,
240. 18:23chipmakers shed over $1 trillion, with  Nvidia alone losing about $300 billion
241. 18:29in a matter of hours. Every retirement  fund holding those stocks got hit.
242. 18:33And that was just one day.
243. 18:35When the dot-com bubble burst, the Nasdaq  kept sliding for more than 2 years,
244. 18:39losing 78% of its value. It  took 15 years to climb back.
245. 18:43But Washington is pushing workers deeper  anyway. The White House has ordered
246. 18:48regulators to open 401ks to private  credit to the private credit market.
247. 18:51The exact same toxic asset pool that Blue  Owl slammed shut to its own investors.
248. 18:56These institutional investors  want their money back.
249. 18:59And you’re being lined up to pay for it.
250. 19:02A new Labor Department rule would strip  away your rights, making it harder for
251. 19:05workers to sue if those investments go  bad. And the shift is already happening.
252. 19:10Empower, one of the largest 401k providers in  America, has partnered with iApollo and PIMCO,
253. 19:15the firm holding billions in Hyperion bonds.  More than 200 employers have already signed up.
254. 19:21Meanwhile, the men at the top are cashing out.
255. 19:23Over the summer of 2025, Amazon founder  Jeff Bezos unloaded $5.7 billion in stock.
256. 19:29Jensen Huang has sold more than  $1 billion of his Nvidia shares.
257. 19:33Gary Winnick made before Global Crossing imploded.
258. 19:36And yet, every single payday, the  same automated order is executed.
259. 19:40Millions of ordinary workers  use their hard earned cash to
260. 19:44automatically buy the overpriced AI  stock the billionaires are selling.
261. 19:48The AI boom has created trillions  of dollars in market value,
262. 19:51but underneath it sits a web of debt. So  what happens when it all comes crashing down?
263. 19:56Watch “What if the AI Bubble Bursts (Day  by Day)” to find out. Or click on this.