Sunita Somvanshi
Why are AI insiders warning that “the music will stop” before the end of 2026? The sharpest answer isn’t found in the rhetoric — it’s in the credit markets and a single filing.
At the SALT London conference in early November, Thiel Capital managing director Jack Selby — a longtime partner of Peter Thiel — said the AI boom is a bubble that could burst before the new year, adding that a company sitting on more cash than it knows what to do with has little reason to rush toward an IPO. His remarks landed as AI infrastructure stocks CoreWeave, Nebius and IREN had fallen more than 30% over roughly a month, while CoreWeave-linked debt was yielding 15–16%. Thiel’s own hedge fund exited its Nvidia stake back in the third quarter of 2025.
What the credit and filing numbers suggest is a shift already under way: with infrastructure debt yielding double digits and one AI leader earning more from treasury interest than it loses operating, capital looks to be rotating away from pure coastal AI hype and toward more disciplined bets — on the power grid, on cybersecurity, and on markets outside Silicon Valley’s usual orbit.
Inside the S-1 Anomaly, Zombie VCs, and the Grid Wall
Selby pointed to Anthropic‘s amended IPO filing, which showed roughly $2.36 billion in nine-month interest income on close to $95.6 billion in cash against a $1.26 billion operating loss — prompting his quip that the company looks “basically a bank.” He separately criticized what he called “zombie” venture funds concentrated in California, New York and Massachusetts, which he said absorb the large majority of US venture capital, arguing that founders outside those hubs can build at a fraction of the valuation. At the same conference, another panelist flagged the US electrical grid’s aging infrastructure as a growing constraint, as data-center power demand is projected to roughly double globally by 2030.
The sharper read on Selby’s position isn’t that AI lacks value — it’s a portfolio-math argument. At the top of the market, a company can sit on an enormous cash cushion while infrastructure peers borrow at junk-bond rates; at the bottom, aging venture funds can keep collecting fees by relabeling stalled bets as AI plays. Both distortions, he argues, can coexist with a few genuine trillion-dollar winners still making the overall investment vintage worthwhile.
Why did Jack Selby call AI company Anthropic “basically a bank”?
Selby made the comparison at the November 2026 SALT London conference because Anthropic’s amended S-1 filing showed it earning more from interest on its cash reserves — roughly $2.36 billion over nine months — than it lost from its core operations, a $1.26 billion loss.
The next signals worth watching are Anthropic’s eventual IPO pricing and fourth-quarter earnings and debt yields across the AI infrastructure sector.
