Tether CEO Just Poured Cold Water on the AI Industry’s Money-Burning Model. Paolo Ardoino pointed out that current AI companies rely on subsidized computing power to expand users, essentially a high-capital-expenditure-driven infrastructure buildout. But asset depreciation cycles are only 3 to 5 years, while the path to profitability remains distant. The rhythm between costs and revenue is falling out of sync, and open-source models keep eroding commercial revenue space—doesn’t this sound like the DeFi TVL frenzy of 2021?

Ardoino’s criticism is not baseless. The AI industry currently faces a triple mismatch: misalignment in the timeline for realizing profits, a disconnect between capital costs and asset maturation cycles, and the squeeze on commercial revenue from open-source models. Against a backdrop of high-leverage expansion and revenue uncertainty, risk is accumulating.

For the crypto market, this is more than just an industry observation. AI and crypto have been competing for the same pool of liquidity—capital from institutions and retail. If the AI money-burning model starts to implode, funds may flow back to crypto; but if AI continues to suck in capital, crypto’s recovery room will be limited. Ardoino’s warning is more of a structural signal: when the CEO of the largest stablecoin issuer begins to question the business model of a neighboring sector, market participants need to reassess the priority of capital flows.

The risk is that a bursting AI bubble could trigger a broader liquidity crunch, and crypto won’t be immune. After all, when the tide goes out, it’s not just AI that’s swimming naked.

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