Bubble Monitor

Demand is not what changed this period; the financing structure behind it is. On August 10 NVIDIA announced platforms with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to mobilise over $500B of third-party capital for AI data centres, explicitly treating compute like commercial real estate or toll roads and keeping most of the resulting debt off NVIDIA's own balance sheet. The market did not read it as unambiguously good: NVIDIA shed roughly $130B of market value that day on renewed concern about circular financing, where a supplier underwrites its own customers. That matters more than any single valuation metric, because the argument that this cycle is safer than 2000 has rested on hyperscalers funding capex from operating cash flow — and Alphabet, with first-half capex up 111% to $98B, turned free-cash-flow negative in Q2 for the first time. Valuation is stretched but not obviously more so than a week ago: the Shiller CAPE reached 40.91 in July, its highest since August 2000 and short of the 44.19 record set in November 1999, and top-five S&P 500 concentration near 30% is the highest in 50 years. The genuine offset is that corporate credit spreads remain tight and markets are not pricing default stress. Supply is finally responding — Micron committed roughly $50B to two Boise fabs on August 20 — but first wafer output is not due until mid-2027, so nothing relieves the current shortage.