AI Bubble: Oil, China, and Washington Threaten the Market

3 reasons the bubble might burst. In his essay "Reality Test", published on June 8, Arthur Hayes identifies the threats that could, in his view, burst the artificial intelligence (AI) boom: rising energy prices, intervention from Washington, and competition from much cheaper Chinese models. The co-founder of BitMEX has adjusted his portfolio to this scenario. Maelstrom has sold several altcoins while retaining bitcoin and ether and increasing its exposure to American energy producers. However, his thesis remains a macroeconomic bet, not a foregone conclusion.

Key Points

• Oil: Brent reached $89 a barrel during U.S. strikes on Iran, and the electricity bill for data centers is following suit.
• The Department of Commerce has ordered Anthropic to cut off access to its Mythos 5 and Fable 5 models for all foreign nationals.
• Open-source Chinese models cost five to ten times less: Lindy, DoorDash, Airbnb, and Siemens have already switched.
• Arthur Hayes predicts the bubble will burst between 2027 and 2028, keeps bitcoin and ether, and parks the rest in Treasury bonds.

Oil and Debt: The Hidden Cost of the AI Race

For Mr. Hayes, the primary danger comes from the Strait of Hormuz. Disruption of oil traffic and the war between the U.S. and Iran have driven up crude prices, indirectly increasing the cost of electricity, materials, and the construction of data centers.

The link is not mechanical, however: American data centers primarily operate on electricity and do not directly consume oil. He reasons more in chains. Sustained higher energy prices feed inflation, keep rates high, and reduce margins in a sector already extremely capital-intensive.

Amazon, Microsoft, Alphabet, and Meta could together allocate around $725 billion to their investments in 2026, which is 77% more than in 2025. Gartner also anticipates $2.52 trillion in global AI-related spending, an increase of 44%.

Arthur Hayes estimates that about $1.5 trillion in debt has financed this expansion since the end of 2022. If the revenues generated by AI do not keep pace, refinancing GPUs and data centers could become the breaking point. He places this potential correction between 2027 and 2028.

Washington Cuts Access, Chinese Models Slash Prices

The second risk has already materialized, but temporarily. On June 12, the U.S. Department of Commerce ordered Anthropic to suspend access to Fable 5 and Mythos 5 for all foreign nationals, including its own non-American employees. Unable to verify the nationality of each user, Anthropic had disabled both models for all its clients.

However, the restriction is no longer fully in effect. After adding a security filter, Washington lifted the block on Fable 5 on June 30. Mythos 5 has regained limited access with American partners. It would therefore be inaccurate to state that the two models remain cut off today.

The episode has nonetheless demonstrated that a foreign company could abruptly lose access to an American model due to an administrative decision. This uncertainty reinforces the third risk identified by the head of Maelstrom: open-source or weight-based Chinese solutions, generally charged at much lower prices.

For Arthur Hayes, the bubble will give way when debt, energy, and falling inference prices converge. Crypto would initially drop along with tech stocks before benefiting from new liquidity injections from central banks. A conviction that explains his tactical retreat, while leaving his exposure to Bitcoin intact.

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