Where Is AI Risk Still Not Priced in?

Ed Elson says AI risk is already priced into public stocks, and the risk that is not priced sits in private markets. Over the past month he cites Nebius down 31%, CoreWeave down 52%, Oracle down 15%, Micron down 18%, and the semiconductor basket down 15%. Nvidia's stock is up, he says, but earnings rose faster, so the forward multiple has been cut in half over the past year. He reads that as investors discounting how long the profits last.

He still calls the buildout a boom and bust, closer to the railroads of 1873. Buyers grabbed chips, then learned that data centers, power, and grid connections take longer, and billions of dollars of chips are sitting in a warehouse. Public investors are marking that down, including the chance that CoreWeave defaults. In private markets, he says, one and a half trillion dollars or two trillion dollars does not matter. When Anthropic goes public, he expects investors to be much pickier.