AI Boom May Spark 2028 Financial Crisis, Warns BitMEX Co-Founder

Arthur Hayes, co-founder of BitMEX, has issued a warning about the potential for a major financial crisis triggered by the AI boom. He believes that once investors start questioning the return on investment (ROI) of AI infrastructure expenditures, the financial cycle will decline and lead to a severe crisis around 2028.

Hayes compared the current AI boom to a typical credit cycle, fueled by hyperscalers, chipmakers, and venture-backed startups. He noted that some companies are financing their expenditures through debt and equity markets, pricing in the expected exponential rise in human productivity brought about by AI.

When the money made through AI is less than the money spent, lenders may stop lending, causing a rapid decrease in asset prices, particularly in stocks. Hayes also suggested that this could have a significant impact on cryptocurrencies, which are closely tied to AI markets due to their similar availability of leveraged products and services.

Hayes believes that some venture capital firms will be severely impacted by the potential crisis, with OpenAI facing significant financial pressure. He noted that banks would likely respond to a crisis by printing large amounts of money, which could lead to increased anxiety for investors and institutions.