Breaking Analysis with Dave Vellante
Aug 10, 2026 · 30 min · 10 segments
We get a lot of questions about whether we're in a bubble & if so when will it burst. Many feel that "Bubble" is a pejorative. I see it differently. To me a bubble is an economic event where asset…
Dave VellanteHost
You know, we get a lot of questions about whether we're in an AI bubble, and if so, when will it burst? Many feel that the term bubble is a pejorative.
I mean, to me, bubble is an economic event where asset prices and valuations in a new or growing market rise far above their current value.
Bubbles are characterized by media hype, investor exuberance, fast, easy money, and FOMO, fear of missing out.
It only requires deployable supply and capital commitments to grow faster than monetizable demand.
When productive, revenue-producing AI capacity takes longer to materialize, pricing will normalize and financing will no longer bridge the gap.
The AI supply chain remains constrained by things like high bandwidth memory, advanced packaging, network fabric, power.
And these bottlenecks not only slow deployment, but they also delay price discovery, meaning the point at which buyers have more choice.
And they postpone the moment when the market discovers whether it has potentially overbuilt.
In this episode, we're going to build on a framework for understanding what could delay the bubble popping, what could trigger it, and which indicators will reveal when scarcity and supply potentially becomes surplus that impacts the market.
And the best place to begin is with the number that makes this cycle look almost unstoppable.
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You know, we get a lot of questions about whether we're in an AI bubble, and if so, when will it burst? Many feel that the term bubble is a pejorative.
I mean, to me, bubble is an economic event where asset prices and valuations in a new or growing market rise far above their current value.
Bubbles are characterized by media hype, investor exuberance, fast, easy money, and FOMO, fear of missing out.
It only requires deployable supply and capital commitments to grow faster than monetizable demand.
When productive, revenue-producing AI capacity takes longer to materialize, pricing will normalize and financing will no longer bridge the gap.
The AI supply chain remains constrained by things like high bandwidth memory, advanced packaging, network fabric, power.
And these bottlenecks not only slow deployment, but they also delay price discovery, meaning the point at which buyers have more choice.
And they postpone the moment when the market discovers whether it has potentially overbuilt.
In this episode, we're going to build on a framework for understanding what could delay the bubble popping, what could trigger it, and which indicators will reveal when scarcity and supply potentially becomes surplus that impacts the market.
And the best place to begin is with the number that makes this cycle look almost unstoppable.