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The acceleration brought by AI is unprecedented, and every industry will face a massive reshaping.
For long-term value investors, only the mathematical inevitability and the physical limits can make it truly a “hu cheng he.”
Everything else may be overturned.

AI: Is the Bubble Actually the Flywheel?
MIT economist Ricardo Caballero makes a fascinating argument in his recent working paper, Speculative Growth and the AI "Bubble":
The real question is not whether AI is a bubble, but whether a bubble itself can create the fundamentals of the future.
Traditional finance assumes that valuations are derived from fundamentals. Future cash flows determine today's prices. If prices rise far above expected cash flows, we call it a bubble. This logic underpins value investing, discounted cash flow (DCF) models, and much of the Efficient Market Hypothesis.
Cabal

AI, bubble or flywheel?
MIT economist Ricardo Caballero proposed a very interesting perspective in his latest working paper, *Speculative Growth and the AI "Bubble"*:
The real question is not whether AI is a bubble, but whether the bubble itself can create future fundamentals.
Traditional finance holds that valuation comes from fundamentals. Future cash flows determine today's price. If the price is far higher than cash flows, it's a bubble. This is the logic shared by almost all value investing, DCF models, and efficient market theory.
Caballero adds a circular causality to this logic

Apple, the company that provides information-feeding terminals for the declining carbon-based civilization beings,
what gives it the audacity to clash with Micron, a company that builds brain cells for the developing silicon-based civilization?🤣

Everyone keeps saying the industry can’t bear storage profits that high.
So what?
Abandon the current silicon-based approach?
Scrap the Von Neumann architecture?
Leapfrog to photonic storage?
Or wait for quantum computing?
For the industry to escape those high storage profits, it first needs a massive breakthrough in the basic physical sciences—then it has to rebuild the semiconductor manufacturing system.
By then, AGI communism should already be a reality🤣

The judgment on storage is far ahead of institutions, there should also be some luck involved,
Today I found that there is actually another judgment ahead of institutions, have I really gotten better? 🤣

The model is the channel, and the channel is king
The model is the platform, and the platform monopolizes

When discussing token prices, the market overemphasizes supply and neglects demand.
The demand for tokens is determined by the value that tokens can provide; the stronger the model, the higher the token value, and the greater the demand.
As model capabilities continue to improve, the compute power/token price will be thoroughly "valorized." Users' ability to generate economic value (ROI) will be the key driving force in determining compute power prices.

Neo Cloud is actually selling dog meat while putting on a sheep’s head.
It should be renamed Neo Power.

This move was completely the opposite of what I should have done.
It seems I'm really not suited for trading.

The U.S. government's ban on Fable is just the beginning.
As model capabilities improve, this becomes an issue that every model company and every government must face.
Powerful models allowing foreign users to use them may impact national security, and allowing domestic users to use them may also impact national security.

Anthropic has banned the use of Fable 5. So I specifically set up the Max plan monthly subscription—will Anthropic refund it?

As of April 2026, the latest data from FINRA shows that the U.S. stock margin debt has surpassed $1.3 trillion, reaching a record high. In terms of absolute amount, it is in the 95%-100% percentile; in terms of margin debt/GDP, it is in the 90%-95% percentile; in terms of margin debt/total market value, it is in the 80%-90% percentile. This indicates a historically high leverage level, but it has not yet reached the extreme levels seen during the dot-com bubble in 2000.
Margin debt has increased by over 50% year-over-year, with a single-month growth of more than $80 billion. This is already

The market will start to FUD the big tech's FCF,
Just looking at the total of Frontier Labs ~$55B ARR and its extremely rapid growth, excluding enterprise users, at the current growth rate, it can close the capex gap of big tech in 2-3 years.
If this is a real estate business, it's a highly profitable real estate venture.
Not to mention these capex are the only chips in the fight for AGI.
Let the bullets fly, buy the dip when it drops too much.
NFA DYOR

Currently, the revenue and stock price in the AI sector perfectly reflect the Red Queen's Law:
Only when (revenue) races at a rapid pace can (stock price) stay in the same place.

What never ceases to amaze me is that people are happy to spend 10 hours a day studying candlestick charts in hopes of making 1% tomorrow,
yet have little interest in spending even 10 minutes a day understanding the fundamentals of AI or the businesses behind it
—knowledge that could help them find 10x or even 100x opportunities over the next year.

The paper “AI+HW 2035: Shaping the Next Decade,” published by Yann LeCun and a group of scientists, academically defines the concept of “intelligence per joule.”
Elon Musk will define the concept of “intelligence per kilogram (load).”
The ultimate application of first principles.