Thiel Capital executive warns AI bubble could burst by the end of 2026
Jack Selby, managing director at Thiel Capital, said at the SALT conference in London on November 5, 2026, that the current artificial intelligence boom is a speculative bubble that could burst by the end of 2026. He said that at some point, the music will stop. Selby said the AI business is extraordinarily capital intensive, involving costly microchips, data centers, and other infrastructure, while AI executives resort to outrageous, fanciful storytelling to raise funds. He said the debt market is still financing AI construction in a quite astonishing way, and said that if he had to bet on when the euphoric AI momentum market would end, he would bet on before the end of this year.
Selby also questioned why Anthropic was rushing to raise public market financing, saying the company is basically a bank because its cash interest income exceeds its business revenue. According to Anthropic’s revised S-1 filing this week, the company generated $2.4 billion in interest income in the first nine months of this year, with an operating loss of about $1.3 billion in the same period, and held about $96 billion in cash and equivalents as of the end of September. He asked why a company with so much money that it does not know what to do with it was still rushing to go public. Selby also predicted that if Democrats regain control of both houses of Congress in this week’s midterm elections, it would be a headwind for defense technology companies such as Anduril.
Original source:
Title: I went to an elite investor forum in London. Everyone was talking about the outlook for AI, jobs, and Elon Musk. Publisher: Business Insider (Theron Mohamed) Publication date: 2026-11-05 URL: https://www.businessinsider.com/salt-london-speakers-ai-bubble-elon-musk-future-jobs-outlook-2026-11 Source type: media report Verification status: key passages from the report were actually read for this piece (verified as of 2026-11-05) Supporting content: Selby said at SALT London that the AI bubble could burst by the end of 2026, emphasized capital intensity and that the music would stop, and questioned Anthropic’s IPO and the sustainability of debt financing
ABAB AI Insight
Jack Selby is the managing director of Thiel Capital and the managing partner of Copper Sky Capital. He was an early PayPal member and has long worked with Peter Thiel. He has previously publicly warned that AI private-market valuations are too high, calling it one of the biggest bubbles in modern private technology investing, and predicted that when it bursts it will burn hundreds of billions of dollars of capital. His remarks at SALT London sharpen the timeline to before the end of 2026, focusing on the scale of capital expenditures, the continuation of debt financing, and the structure of some companies, such as Anthropic, that are driven by cash interest rather than core business profits.
This is consistent with recent moves in AI infrastructure stocks: shares of companies such as CoreWeave, Nebius, and IREN have fallen more than 30% over the past month or so, and the yields on some related bonds have risen into the 15%-16% range. Thiel-related funds reportedly liquidated about $100 million in Nvidia holdings in the third quarter of 2025, reflecting internal caution about valuations. Selby’s view emphasizes that AI technology itself is revolutionary, but that the current financing depends on storytelling and ultra-low-priced services (similar to early Uber subsidies), and once costs must be priced at actual spending levels, the market may reprice rapidly.
Compared with the internet bubble, AI construction depends more on physical assets (chips, power, data centers) and is more capital intensive, so losses for losers could expand by orders of magnitude. Unlike traditional tech bubbles, the current cycle also involves massive debt and sovereign capital (such as investors from the Middle East), and geopolitical factors or a tightening financing window may become triggers. Selby’s warning does not deny the long-term value of AI; rather, it points out that the current stage of euphoric momentum is unsustainable, consistent with his similar remarks previously made on Bloomberg and other occasions.
ABAB News · Cognitive Law
Capital-intensive technology bubbles often peak while debt financing is still open, not when the technology itself stalls.
Companies that mask operating losses with interest income have public-market valuations that depend on narrative rather than cash flow.
The exit of a single major investor and public warnings from executives often precede a broader market repricing.