The AI Bubble in November 2025: 95% Zero Return and the $4.6 Trillion Question

Transparency Note

Syntax.ai is an AI company. We benefit when people invest in AI infrastructure. This creates an obvious conflict of interest when writing about whether AI investment is a bubble. We've tried to present the evidence honestly—including data that suggests the industry we're part of may be dramatically overvalued. You should factor our commercial interest into how you read this analysis.

The Short Version

The headline number: 95% of organizations investing in GenAI are getting zero return (MIT, 2025)
OpenAI's math: Loses $3 for every $1 earned. Projected $115B cash burn through 2029.
Michael Burry's bet: $1.1 billion short against Nvidia, comparing it to Cisco's dot-com collapse
The consensus shift: Bank of England, IMF, Goldman Sachs all warning of bubble risk in October 2025
Even the bulls admit it: Sam Altman says investors are "overexcited." Bezos calls it "an industrial bubble."

Here's a number you won't see in AI marketing materials: 95% of organizations investing in generative AI are getting zero return. Not low return. Not below-expectations return. Zero. Meanwhile, Nvidia is valued at $4.6 trillion—more than the GDP of every country except the US, China, and Germany. Something doesn't add up.

Between October 8-11, 2025, something flipped. Before that week, not a single major financial institution was openly calling AI a bubble. Suddenly, the Bank of England warned of "risk of sharp market correction." The IMF noted "echoes of the late '90s dot-com bubble." Goldman Sachs released a report titled "AI: IN A BUBBLE?" Morgan Stanley's CEO warned of a 10-15% market drawdown.

What changed? Nothing and everything. The numbers were always there. The institutions just started saying them out loud.

The Numbers Nobody Wants to Talk About

95%

Organizations getting ZERO return on GenAI investment

Source: MIT, August 2025

80%

Companies reporting no significant AI earnings impact

Source: McKinsey

$13.5B

OpenAI's net loss (first half 2025)

Source: Microsoft disclosures

17x

More AI investment than pre-dot-com Internet investment

Source: Financial analysis

The OpenAI Math That Should Terrify Investors

Let's start with the company at the center of the AI boom. OpenAI's financials, leaked through Microsoft disclosures and regulatory filings, paint a picture that would be alarming for any company—let alone one valued at $150+ billion.

For every dollar OpenAI earns, it loses three.

That's not hyperbole. For the first half of 2025, OpenAI brought in $4.3 billion in revenue and reported a net loss of $13.5 billion. Microsoft's public disclosures show OpenAI lost $12 billion in Q3 2025 alone.

OpenAI's Projected Losses

2025: $9 billion net loss projected
2026-2028: Massive annual losses continuing
2028: $74 billion in operating losses projected for that year alone
Cumulative through 2029: $115 billion cash burn expected
Break-even: Projected for 2029 or 2030 (maybe)

HSBC's assessment: OpenAI faces a $207 billion funding shortfall by 2030.

Sam Altman himself acknowledged this in August 2025: "Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes."

When the CEO of the company at the center of the AI boom says investors are "overexcited," that's a signal worth taking seriously.

The Circular Investment Problem

Here's where it gets weird. And by weird, I mean "reminiscent of the accounting structures that enabled Enron."

Take the recent $100 billion deal between Nvidia and OpenAI. Here's how it works:

Nvidia invests $100 billion in OpenAI to fund data centers
OpenAI uses that money to buy... Nvidia chips
Nvidia reports the chip sales as revenue
The "growth" looks organic from the outside

Critics call this structure "artificial demand inflation." Nvidia is essentially subsidizing one of its biggest customers so that customer can buy more Nvidia products. The revenue is real in an accounting sense. Whether it represents genuine market demand is a different question.

The hyperscalers are hiding their losses in special purpose vehicles too, just like Enron!

— Reddit user u/miskdub, r/economicCollapse

Commenting on AI bubble reporting, October 2025

That comparison might be harsh. But the structural similarities are uncomfortable. AI hyperscalers are using SPVs (special purpose vehicles) to shift massive spending off their books. They're using extended depreciation schedules to make infrastructure look less expensive. They're engaged in circular investment flows that inflate reported demand.

Every bubble has financial engineering. This one has a lot of it.

Michael Burry's $1.1 Billion Bet

In November 2025, Scion Asset Management—Michael Burry's hedge fund—disclosed put options worth $1.1 billion against Nvidia and Palantir. Burry, famous for shorting the 2008 housing market, isn't known for making small statements.

His thesis: "And once again there is a Cisco at the center of it all, with the picks and shovels for all and the expansive vision to go with it. Its name is Nvidia."

The Cisco comparison is pointed. During the dot-com boom, Cisco was the infrastructure play—the company whose routers and switches powered the internet. It seemed invincible. At its peak in 2000, Cisco was briefly the most valuable company in the world. Then the bubble burst. Cisco's stock dropped 86% and took 23 years to recover to its 2000 high.

                The Cisco Parallel
                
                            Factor
                            Cisco (2000)
                            Nvidia (2025)
                        
                            Role
                            Infrastructure for internet
                            Infrastructure for AI
                        
                            "Picks and shovels" narrative
                            Yes
                            Yes
                        
                            Massive capex by customers
                            Yes
                            Yes
                        
                            Valuation relative to economy
                            Briefly largest company
                            Larger than most countries' GDP
                        
                            Customer ROI clarity
                            Unclear at scale
                            95% reporting zero return

Factor	Cisco (2000)	Nvidia (2025)
Role	Infrastructure for internet	Infrastructure for AI
"Picks and shovels" narrative	Yes	Yes
Massive capex by customers	Yes	Yes
Valuation relative to economy	Briefly largest company	Larger than most countries' GDP
Customer ROI clarity	Unclear at scale	95% reporting zero return

Nvidia's response? A private memo pushed back on Burry's claims, arguing their chips remain productive far longer than critics claim. On their earnings call, CFO Colette Kress pointed to their CUDA software ecosystem as a differentiator that didn't exist for Cisco.

JPMorgan analysts sided with Nvidia, calling Burry's bet a mistake. Wedbush's Dan Ives said "Fears of an AI Bubble are way overstated."

Someone's going to be very right. And someone's going to be very wrong.

What Reddit Thinks (And Why It Matters)

Financial sentiment on Reddit—particularly r/investing, r/stocks, and r/economicCollapse—has become a surprisingly accurate contrarian indicator. When retail investors are unanimously bullish, professionals get nervous. When retail is panicking, bottoms often follow.

Current Reddit sentiment on AI: deeply divided and increasingly skeptical.

Reddit's Temperature Check

u/Mountain_Dandy: "Meh, what could go wrong?..." (sarcastically responding to AI bubble analysis)
u/the_hucumber: "There's a handful of huge companies all throwing money in gambling that their AI model will win and corner the market."
u/Craic-Den: "Bubble go pop. Everyone suffers."
u/gigitygoat: "We'll be bailing them out again."

The pessimism isn't universal—plenty of Reddit users remain bullish. But the tone has shifted noticeably from "AI will change everything" to "AI might be the next crash."

One data point that's circulating heavily: the current AI bubble is reportedly 4x the size of the 2007 subprime mortgage bubble, and 17x larger than the dot-com bubble.

Those numbers should prompt serious reflection—even if comparing bubbles across different asset classes and time periods is methodologically complex.

The Harari Framework: Why This Matters Beyond Money

Here's where we need to zoom out. The AI bubble isn't just a financial story. Through Yuval Noah Harari's lens, it's a case study in how information networks prioritize order over truth.

Order vs. Truth in the AI Bubble

Harari's thesis in Nexus: information networks throughout history have optimized for what maintains stability and engagement, not for what's true.

The AI hype cycle is a perfect example:

What maintains order: "AI will transform everything"—keeps investment flowing, stock prices up, employees motivated
What's true: "95% of organizations are getting zero return"—doesn't get headlines, doesn't drive engagement

The market has been a self-reinforcing system—positive narratives create investment, investment creates growth metrics, growth metrics validate narratives. The question is whether it can self-correct before reality forces the correction.

The Normalization Window

Harari identifies 2025-2030 as the critical period when AI norms become permanent. From a financial perspective, this window matters for a different reason: the practices being established now—circular investment structures, SPVs for hiding losses, extended depreciation schedules—could become normalized features of AI finance.

If the bubble deflates gradually, these practices might be reformed. If it pops suddenly, they'll be the subject of congressional hearings.

The Bull Case (Honest Version)

Per our commitment to self-correction, we should present the strongest counter-arguments to the bubble thesis.

                Why the Bears Might Be Wrong
                Valuations aren't as stretched: Goldman Sachs notes the Magnificent 7's median P/E ratio is "roughly half" what the largest companies had in the late 1990s
Revenue is real: Unlike dot-com companies, AI leaders have substantial revenue. Nvidia made $115.2 billion in FY2025.
Infrastructure is being built: Unlike Webvan or Pets.com, the data centers being constructed will exist regardless of which AI companies survive
Enterprise adoption is continuing: 92% of companies plan to increase GenAI investment through 2028 (McKinsey)
"Super cycle" theory: Some analysts believe we're at the beginning of a decade-long transformation, not the end of a hype cycle

            

The strongest bull argument: AI might be overhyped without being overvalued. The technology could transform industries over 10-20 years while current investment levels prove roughly appropriate.

The counter: that's what every bubble says.

What Actually Triggers Bubble Bursts

Yale's analysis identifies three potential triggers for AI specifically:

1. ROI Backlash

CFOs and boards start demanding proof. Budget cuts follow. The 95% getting zero return stop investing.

2. Energy/Infrastructure Crunch

A visible power shortage or high-profile project cancellation due to grid constraints signals that physical limits are real.

3. Confidence Shock

A single major failure—a company going bankrupt, a product launch disaster, a scandal—cascades into broader reassessment.

Twenty-five years ago, the original dot-com bubble burst after debt financing built out fiber-optic cables for a future that had not yet arrived. If we get to the point after spending hundreds of billions of dollars on data centers that we don't need a few years from now, then we're talking about another financial crisis.

— Yale Insights analysis

Jamie Dimon, head of JP Morgan, was blunter: "I think AI is real. But I also think there's a higher chance of a meaningful drop in stocks over the following two years than the market was reflecting."

What the Industry Leaders Actually Say

Here's the uncomfortable part: even the people benefiting most from AI investment are expressing concerns.

Sam Altman (OpenAI): "Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes."
Sundar Pichai (Google): When asked if Google would be immune if the bubble burst: "I think no company is going to be immune, including us."
Jeff Bezos (Amazon): Called the current environment "kind of an industrial bubble."
Goldman Sachs CEO David Solomon: Expects "a lot of capital that was deployed that [doesn't] deliver returns."

When the CEOs of OpenAI, Google, and Amazon all acknowledge bubble dynamics, the debate isn't whether there's froth—it's how much and what happens when it deflates.

The Most Absurd Data Point

I want to close with the example that captures the current moment perfectly.

In late 2025, a company called Thinking Machines—helmed by former OpenAI executive Mira Murati—raised the largest seed round in history: $2 billion at a $10 billion valuation.

$10B

Valuation for a company that won't say what it does

Thinking Machines: No product. No disclosed roadmap. Largest seed round in history.

The company has not released a product. The company has refused to tell investors what they're trying to build.

It was the most absurd pitch meeting.

— Anonymous investor, on Thinking Machines fundraise

A $10 billion valuation for a company that won't say what it does. That's either visionary investing in an unprecedented technological transformation, or it's the kind of story that gets told in documentaries about financial manias.

We'll find out which.

What This Means for You

If you're an investor: the honest answer is that nobody knows whether this is a bubble about to burst or a super cycle just getting started. The people who sound most confident are probably wrong. Diversification and understanding your risk tolerance matter more than picking the right narrative.

If you're a company evaluating AI investment: the 95% zero return figure should inform your expectations. AI might transform your business—but most organizations trying it aren't seeing results yet. Plan accordingly.

If you're in the AI industry (like us): the normalization window matters. The practices we establish now—honest about limitations, transparent about costs, realistic about timelines—will define how AI integrates into the economy. We have a choice about whether this period looks like sustainable growth or boom-bust-regulation.

The Honest Assessment

Is there an AI bubble? Probably. Multiple major institutions, the industry's own CEOs, and basic ROI analysis all point that direction.

Will it burst catastrophically? Unknown. Bubbles can deflate slowly or pop suddenly. The financial engineering we're seeing suggests the potential for sudden rather than gradual.

Does AI have genuine long-term value? Almost certainly yes. But that was also true of the internet in 2000. Being right about the technology doesn't protect you from being wrong about the timing or the valuations.