The AI revolution is being called a “gold rush,” and Nvidia has unequivocally become the $5.05 trillion company selling all the shovels. But a “bust” debate is raging, fueled by warnings from the IMF and Bank of England, asking a simple question: Is anyone actually finding any gold?
The case for the “boom” is clear: the shovel-seller is making a fortune. Nvidia’s value grew $1 trillion in three months. It has a $500 billion order book for its “shovels” (chips). A massive $100 billion deal with OpenAI, the biggest “miner” of all, seems to confirm the rush is real.
Partnerships with Uber, Nokia, and the US government suggest everyone is joining the rush, which is also backed by President Trump.
However, the “bust” argument is that the miners are going broke. Analysts are sounding the alarm that “nearly all AI pilot programs in businesses fail.” Companies are spending fortunes on Nvidia’s chips but are not finding “gold” in the form of profits or efficiency.
This is why the IMF and BofE are warning of a bubble. They fear the $100 billion OpenAI deal is “circular”—miners paying for shovels with borrowed money. If no gold is found soon, the demand for shovels will evaporate, and the $5T valuation will collapse.