Construction Boom and Potential Crash

Arthur Hayes, co-founder and chief investment officer of crypto investment firm Maelstrom, is predicting that the artificial intelligence data center buildout will overshoot, crash, and ultimately send bitcoin higher. Hayes, the former CEO of crypto exchange BitMEX, made the case in Singapore at the Gamma Prime Investing Conference, where he told CNBC that humanity is "wasting multi-trillion dollars" building AI data centers.

Economic History and Overbuilding

Hayes believes that the construction boom will result in an abundance of cheap computing capacity while burdening infrastructure providers with heavy financial obligations contingent on AI companies eventually paying for the capacity they have reserved. He cites historical examples of overbuilt technology rollouts and the 2008 financial crisis as justification for his bet.

AI Data Center Buildout and Its Impact

SpaceX, OpenAI, and Anthropic are among the end users driving demand for that computing power, Hayes said, and none of them currently makes money. Providers are expected to seek payment when new data center capacity is delivered, which Hayes places in late 2027 or 2028. He argues that investors who get into position before such bailouts arrive stand to gain, pointing to bitcoin and other crypto as assets that will perform well when the bailout comes.

Bitcoin as a Hedge

Hayes said that betting against AI companies holds little appeal for him, describing short positions as "not really a great investment opportunity," while reiterating his view that large-scale technology rollouts reliably attract more capital than the market can absorb.

Abundance of Cheap Computing Power

A Brookings Institution study — authored by Columbia Business School professor Stijn van Nieuwerburgh — put total spending on data centers and related AI infrastructure at $10.3 trillion between 2025 and 2032, a scale exceeding any prior technology rollout in American history, including railroads and the internet. Van Nieuwerburgh warned that uncertain revenue streams and complex debt arrangements create meaningful downside risk if expectations are revised.

New Project: Flop

Hayes is launching a new project, Flop, an AI-agent payments venture, expected to launch in the first quarter of 2027. The project aims to create a spot market for computing power, where participants provide GPUs and perform AI inference in exchange for Flop tokens. Hayes believes that if agents can convert a currency directly into compute, they will use this currency.

Conclusion

Hayes concludes that the AI data center buildout will result in an abundance of cheap computing power, burdening infrastructure providers with heavy financial obligations. He believes that investors who get into position before such bailouts arrive stand to gain, pointing to bitcoin and other crypto as assets that will perform well when the bailout comes.