Arthur Hayes Warns AI Compute Overbuilding Will Lead to Crash, Benefit Bitcoin

Arthur Hayes, former CEO of BitMEX and co-founder of crypto investment firm Maelstrom, said at the Gamma Prime investment summit in Singapore that humanity is wasting trillions of dollars on AI data center construction. He argued that the massive buildout will eventually make compute extremely cheap and abundant, setting the stage for overcapacity.

Hayes predicted that a key test will come between late 2027 and 2028, when a wave of new data center capacity is delivered and customers must honor their compute purchase commitments. He noted that SpaceX, OpenAI and Anthropic are end users driving compute demand but are not yet profitable, while upstream suppliers such as memory chip makers and Nvidia are already profitable. He added that AI companies could become profitable if the practical value of AI improves significantly over the next 12 months.

Citing financial history, Hayes said every major technology adoption wave has involved overbuilding, followed by a crash and government bailouts. He believes the excess liquidity from bailouts will benefit bitcoin and other cryptocurrencies.

Based on his view that AI infrastructure will lead to compute abundance, Hayes launched Flop, a payment project for AI agents, expected to go live in the first quarter of 2027. The project aims to build a spot market for compute, where participants provide GPU resources and perform AI inference tasks in exchange for Flop tokens. Hayes said there is currently no payment network dedicated to AI agents, and his bet is that agents will adopt a token that can be directly exchanged for compute.