Arthur Hayes, former CEO of BitMEX, is betting that the artificial intelligence boom will eventually produce the usual results: overinvestment, a crash, and ultimately a bailout that drives up the price of cryptocurrencies.
Hayes, co-founder and chief investment officer of crypto investment firm Maelstrom, said in response to a question from CNBC at the Gamma Prime Investment Conference in Singapore that humanity is “wasting trillions of dollars” building AI data centers.
The massive expansion of data centers will eventually make computing power “very cheap and very plentiful,” Hayes said.
This bet runs counter to the massive investments being poured into AI infrastructure as technology companies race to secure the computing power needed to develop and run increasingly sophisticated AI models. Hayes sees this buildup as setting the stage for an economic downturn that he expects will eventually lead to overcapacity and ultimately benefit cryptocurrencies.
“If you study the history of finance, if you study all the major technological developments, you find that it’s always overbuilt. There’s always a crash, there’s always a bailout,” Hayes said.
Hayes pointed to the aftermath of the 2008 financial crisis and other events over the past two decades and said investors who take such relief measures stand to benefit.
“Thankfully we have Bitcoin and other cryptocurrencies to absorb excess liquidity, so we know which assets will perform best when the bailout occurs,” Hayes said, adding, “We just need to be patient.”
SpaceX, OpenAI and Anthropic are among the end users driving demand for computing power, but none of the companies are making a profit, Hayes said. Once the data centers currently under construction are completed, he said, infrastructure providers will require companies to pay for the compute they commit to.
Hayes said that could happen in late 2027 or 2028, when much of the new data center capacity is delivered.
The bullish case is that AI becomes “so useful” over the next 12 months that demand increases enough for AI companies to turn a profit, Hayes said.
Hayes said some companies supplying the AI boom are already making profits, citing memory chip makers and Nvidia. The question for investors is whether they are paying an appropriate multiple of those companies’ future earnings, he added.
Hayes also said he doesn’t like betting on falling prices or shorting AI companies, calling it “not really a great investment opportunity,” but adding that major technology developments have historically been overbuilt.
The rich computing power created by building AI is also behind Hayes’ latest cryptocurrency venture, Flop, an AI agent payments project scheduled to launch in the first quarter of 2027.
Hayes said cheaper and more abundant computing power would enable the proliferation of AI agents.
His new project, Flop, aims to create a spot market for computing power, where participants are rewarded with Flop tokens for providing GPUs and running AI inference.
Hayes said there is currently no payment network for AI agents. Flop aims to create a spot market for computing.
“If agents can directly convert currency into computing that they eat and consume, they will use this currency,” Hayes said. “That’s our bet.”
