Former BitMEX CEO Arthur Hayes says the artificial intelligence boom is heading toward a familiar pattern. He expects too much investment, followed by a crash and then a bailout.
Hayes is co-founder and chief investment officer of crypto investment firm Maelstrom. He spoke to CNBC at the Gamma Prime Investing Conference in Singapore.
He said humanity is "wasting multi-trillion dollars" on building AI data centers. He believes this buildout will eventually make computing power "extremely cheap and extremely plentiful."
Hayes Expects an AI Overbuild and Bailout
Technology companies are spending heavily to secure the computing power needed to build and run advanced AI models. Hayes expects this spending to create more capacity than the market needs.
"If you study financial history and you study every single major technological rollout, it always is overbuilt. There always is a crash, and there always is a bailout," Hayes said.
He said investors who position for bailouts stand to benefit. He pointed to the period after the 2008 financial crisis and other events over the past two decades.
"Thankfully, we have bitcoin and other crypto to soak up that excess liquidity, and so we know the asset that's going to perform the best when the bailout comes," Hayes said. He added that "you just have to be patient."
Hayes named SpaceX, OpenAI and Anthropic as end users driving demand for computing power. He said none of them makes money.
Once the data centers now under construction are finished, infrastructure providers will seek payment for the compute these companies have committed to, Hayes said. He expects that test to arrive in late 2027 or 2028, when much of the new capacity is delivered.
Hayes also laid out the bull case. If AI becomes "so useful" over the next 12 months, demand could grow enough for AI companies to turn a profit.
He said some companies supplying the AI boom are already making money, including memory chipmakers and Nvidia. The question for investors, he said, is whether they are paying the right multiple for those companies' forward earnings.
Hayes said he does not like shorting AI companies, calling it "not really a great investment opportunity." Still, he repeated that major technology rollouts have historically been overbuilt.
Flop Aims to Build a Market for Compute
The expected surplus of computing power is also behind Hayes' newest crypto venture, Flop. It is an AI-agent payments project.
Hayes said cheaper and more plentiful computing power would allow AI agents to spread. He said there is currently no payments network built for AI agents.
Flop aims to create a spot market for computing power. Participants would be rewarded with Flop tokens for providing GPUs and performing AI inference.
"If agents can convert a currency directly into compute, which is what they eat and consume, then they will use this currency," Hayes said. "That's our bet."
Flop is expected to launch in the first quarter of 2027.
