Former BitMEX CEO Arthur Hayes is betting that the artificial intelligence boom will eventually produce a familiar result: too much investment, a crash and, ultimately, a bailout that sends crypto soaring.
Hayes, co-founder and chief investment officer of crypto investment firm Maelstrom, said in response to questions from CNBC at the Gamma Prime Investing Conference in Singapore that humanity is “wasting several billion dollars” on building AI data centers.
Mass construction of data centers would eventually make computing power “extremely cheap and extremely abundant,” Hayes said.
This bet flies in the face of massive investments in AI infrastructure, as technology companies race to obtain the computing power needed to develop and run increasingly advanced AI models. Hayes believes that construction will eventually become overcapacity, paving the way for a slowdown that he believes will ultimately benefit crypto.
“If you study financial history and every major technology deployment, you’ll find that there’s always overbuilding. There’s always a crash and there’s always a bailout,” Hayes said.
Investors who position themselves for these bailouts will benefit, Hayes said, pointing to the aftermath of the 2008 financial crisis and other episodes over the past two decades.
“Fortunately, we have Bitcoin and other cryptocurrencies to absorb this excess liquidity, and so we know the asset that will perform best when the bailout comes,” Hayes said, adding that “you just have to be patient.”
SpaceX, OpenAI and Anthropic are among the end users driving demand for computing power, and none of them are making money, Hayes said. Once the data centers currently under construction are completed, infrastructure providers will demand payment for the compute these companies have committed to, he said.
This could come in late 2027 or 2028, when much of the new data center capacity will be delivered, according to Hayes.
The problem is that AI will become “so useful” over the next 12 months that demand will increase enough for AI companies to become profitable, Hayes said.
Some companies fueling the AI boom are already making money, Hayes said, citing memory chip makers and Nvidia. The question for investors is whether they are paying the right multiple for these companies’ forecast earnings, he added.
Hayes also said he doesn’t like betting on falling prices or shorting AI companies, believing it “doesn’t really make for a great investment opportunity,” but added that major technology deployments have always been overrated.
The abundance of computing power created by AI development is also behind Hayes’ latest crypto venture, Flop, an AI agent payments project expected to launch in the first quarter of 2027.
Cheaper and more abundant computing power would allow AI agents to proliferate, Hayes said.
Its new project, Flop, aims to create a spot market for computing power, where participants will be rewarded with Flop tokens for supplying GPUs and performing AI inference.
There are currently no payment networks for AI agents, Hayes said. Flop aims to create a spot market for computing.
“If agents can convert a currency directly into computing, what they eat and consume, then they will use that currency,” Hayes said. “It’s our bet.”
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