Is AI a Bubble? | Gavin Baker on Data Centers, GPUs, and the AI Economy

July 15, 2026

1:01

Is AI a Bubble? | Gavin Baker on Data Centers, GPUs, and the AI Economy

Here's something that might surprise you — Gavin Baker argues that today’s AI boom isn’t a bubble like the internet craze of the early 2000s. Instead, he points out that the massive buildout of data centers, GPUs, and AI infrastructure is rooted in real economic shifts, not just hype. According to Baker, the unprecedented demand for custom silicon from Nvidia, Google, and others shows AI is moving from experimentation into the mainstream economy — something that content+a16zpodcast@a16z.com’s Gavin Baker emphasizes. Unlike the dot-com bubble, the current cycle is driven by tangible business models, long-term infrastructure investments, and a clear path to profitability. So what does this mean? The AI gold rush isn’t about fleeting hype; it’s about foundational changes that could reshape entire industries. If Baker’s right, next year’s winners will be those who understand the economics behind AI’s infrastructure — and who invest accordingly.

As part of our summer replay series, we're revisiting one of the standout conversations from Runtime, a16z's conference on AI infrastructure and the future of computing.

Gavin Baker, Managing Partner and CIO of Atreides Management, joins David George to examine the biggest questions surrounding today's AI investment cycle. Is AI a bubble? What does the unprecedented buildout of data centers, GPUs, and compute infrastructure mean for the economy? And how should investors think about the companies building the next generation of AI?

The conversation explores frontier models, Nvidia, Google, custom silicon, AI infrastructure, application software, robotics, and why Baker believes today's AI investment cycle looks fundamentally different from the internet bubble of the early 2000s. Along the way, they discuss the economics of GPUs, enterprise software, AI business models, and what comes next as AI moves from experimentation into the broader economy.

Resources:

Follow Gavin Baker on X: https://x.com/GavinSBaker

Follow Atreides Management on X: https://x.com/atreidesmgmt

Follow David George on X: https://x.com/DavidGeorge83

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Audio Transcript