Famous short-seller Jim Chanos compares the artificial intelligence craze to the tech stock bubble

Famous short-seller Jim Chanos warned in an interview with Bloomberg Television that after a 16-year bull market, the situation is quite extreme, and he compared the artificial intelligence capital expenditure boom to the tech bubble of the 1990s, indicating that AI is similar to the internet's dominant position in the tech sector during the 90s, serving as a substitute narrative for the current financial cycle.

Chanos expressed concerns about the massive capital expenditures on AI infrastructure, stating that such expenditures far exceed the approximately $100 billion in financing for vendors during the internet era. He specifically named large tech companies like NVIDIA (NVDA.US) and Microsoft (MSFT.US), suggesting that they seem willing to go to great lengths to remove actual equipment from their balance sheets through innovative financing arrangements.

He believes that these companies are worried about equipment depreciation and related accounting treatments, as well as their reluctance to directly record the enormous capital demands on their balance sheets