翻訳待ち：On theCUBE Pod: AI bubble debate heats up and neocloud earnings challenge doubters

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The debate over whether we are in an artificial intelligence bubble took a new turn this week. Despite the ballooning AI spending, Dave Vellante (pictured, right), chief analyst for theCUBE Research, contends that any bursting point may be far off. Now that Nvidia Corp. Chief Executive Jensen Huang, has committed $500 billion to establish independent financing platforms for AI infrastructure, the AI buildout may be too big to fail — or, at least, fail quietly. “Intelligence is hard to model out,” said John Furrier (left), executive analyst for theCUBE Research. “It’s going to be highly elastic. Inference is a big part of it. Agents generate machine-dominated workloads. Robotics, high compute, falling prices, will simulate demand faster than supply will expand. If demand isn’t just about the gear and it’s about the intelligence it produces, we might be at the beginning of the largest consumption phase of AI.” On the latest episode of theCUBE Pod, Furrier and Vellante looked at both sides of the AI bubble conversation. They also discussed the growth of neoclouds and why the markets are underestimating Cisco Systems Inc. Bubble or no bubble? That is the question The podcast hosts are split on the AI bubble: Vellante expects Nvidia’s investments to delay the bubble bursting, while Furrier argues that there may be no bubble at all. If inference costs drop and workloads kick in, that could provide a soft landing for the industry’s massive AI buildout. “A bubble happens when the market prices rise exceptionally fast and prices are unusually high … which is what’s happening now,” Vellante said. “The question is, will the bubble burst? The first thing that could happen to burst the bubble … is that the capital runs out before the end monetization. If financing dries up before the end, before [JPMorgan Chase & Co] monetizes, that could be problematic.” Vellante’s recent analysis noted that the AI supply chain is constrained by high-bandwidth memory, advanced packaging, network fabric, power and site readiness, which could delay supply relief and postpone the end of the current bubble. Huang’s decision to turn AI compute into collateral through Nvidia’s recent partnerships ensures that if AI demand falters, it will affect the entire system of semiconductor suppliers, neoclouds and infrastructure investors. “There’s two clocks,” Vellante said. “There’s the IT infrastructure clock, compute storage networking, that can go pretty fast. The long cycle clock is all that other stuff. It’s the data centers, it’s the power, it’s the getting past regulatory issues. All of that takes decades sometimes. So, those two different clocks … govern the timing of that potential bubble bursting.” Huang is also funding the neoclouds, which could be the most dangerous part of the whole ecosystem, according to Furrier. However, he sees the AI buildout as being fueled by a strong user base that could sustain the momentum, though AI has its opponents, especially from the younger generation. “Everyone sees AI and they go, ‘I get this,’” he said. “There’s demand for it. It’s a significant shift in the marketplace for user behavior and business value that’s easy to identify. The demand that we’re seeing for AI and intelligence is clear, hence the buildout. The question is, can that actually be leveraged into monetization?” Investors reward neoclouds but not Cisco Although neoclouds hold a more tenuous position than legacy clouds, leading companies are beating the naysayers. CoreWeave Inc. announced $2.6 billion in quarterly revenue and Nebius Group N.V.’s revenue grew to $582.3 million, suggesting that there could be a long-term place in the marketplace for neoclouds. “The backlog on CoreWeave is a sign that there’s demand,” Furrier said. “That’s why I focus on the utilization. Because if it doesn’t come home, they’re overpaid, because the prices are high on supply scarcity … but that will normalize. That will figure itself out by better computer architecture.” Elsewhere in the marketplace, Cisco’s achievements got a lukewarm reception. The networking company’s earnings surpassed expectations, but its stock declined after hours. This is shortsighted on investors’ part, according to Vellante and Furrier, who argue that Cisco is well-positioned to provide the interconnected network for AI intelligence. “Cisco had an awesome quarter,” Vellante said. “They missed the gross margin target by a hundredth of a basis point, slim margin. They’re growing the company top line by 18%. Their product revenue grew 35%. They’re right in the middle of the AI mix. If we’re in a bubble, Cisco should have gone up because that was a great quarter.” Watch the full podcast below to find out why these industry pros were mentioned: Brian J. Baumann, founder of NYSE Wired and director of capital markets, technology, at NYSE Sarbjeet Johal, founder and CEO of Stackpane Rob Hof, editor-in-chief at SiliconANGLE Media Jensen Huang, president, co-founder and CEO of Nvidia George Steinbrenner, former principal owner and managing partner of Major League Baseball’s New York Yankees Bruno Aziza, group VP, data, BI and AI at IBM Jeff Bezos, chairman of Amazon.com Adrian Cockcroft, tech adviser Teresa Carlson, former president and chief commercial officer of Flexport George Gilbert, principal analyst at theCUBE Research Ali Ghodsi, co-founder and CEO of Databricks Chen Goldberg, senior vice president of engineering at CoreWeave Alex Karp, CEO of Palantir Technologies Zedd, DJ, record producer DJ Snake, DJ, French record producer Here’s the full episode of this week’s theCUBE Pod: You can also listen to us on Apple Podcasts or on Spotify. And for those who prefer to watch, check out our YouTube playlist. 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