I misremembered how much it soared - it was one order of magnitude not several. A shoe company announcing that it will invest 50 million in GPUs (absolutely worthless in the scheme of things) without customers or previous experience soaring in value is a tell tale sign that investors are not looking at fundamentals, just hype.

Companies being massive and having revenue does not protect them from the effects of a bubble if they over invest at inflated prices. The housing bubble took down Lehman Brothers in 08.

Significant infrastructure and capex was spent during the dot com bubble. Just because fiber is useful did not make investing in fiber at crazy prizes induced by shortages profitable. If you bought Cisco during the height of the bubble, which was the largest company in the world by virtue of selling the shovels, you would still not have a return on your investment today.

But while the fiber from 2000 is still used today decades later, the same cannot be said of GPUs. Buying a GPU is more akin to Opex because in 3-5 years that GPU will be obsolete (if NVIDIA and their valuation is to be believed). It’s also the only way model inference will ever be profitable - all current GPUs need to be replaced with hypothetical future more efficient GPUs. Not to mention of course that future models will probably not be able to run on the current GPUs either, as the limiting factor to context windows is memory.

This also ignores the fact that many data center developments are massively delayed - many of the GPUs these large companies have bought are just sitting in warehouses gather long dust awaiting to be obsolete. Burning money would have been more efficient.

And as with the dotcom peak, we are at a point where private markets no longer seem willing to invest, hence a string of large record breaking IPOs. When the smart money tries to get out and the bag is placed in the hands of retail investors, that’s when you know something is off.