Derek Thompson

And he said, quote, it was the most absurd pitch meeting.

She was like, so we're doing an AI company with the best AI people, but we can't answer any questions, end quote.

And so when I look at this, I have to admit, this does somewhat remind me of a dot-com company that has vast promises for reshaping some aspect of retail, but very little underlying business that people can see.

Or maybe like some housing development that's built in the excerpts of God knows what, Phoenix,

It's beautiful and perfectly financed, at least on the outside, and yet no one is moving into the houses.

So to what extent do stories like this at least give you like the tiniest little bit of a spidey sense that like, wow, there is a lot of frothy expectation and funding going toward very expensive projects right now with no clear proof that they're going to actually throw off revenue?

And here, let me argue with myself.

I remember talking to the folks from Stripe about what they were seeing on their platform of AI companies versus non-AI companies.

And they showed me really compelling data that shows that firms who self-describe as AI companies on Stripe are dominating revenue growth on the platform and surpassing the growth rate of any group in that platform's history.

So what's confusing to me, but also fascinating, is that it can simultaneously be true

that revenue growth for AI companies is astounding, and that the amount of spending on AI infrastructure is so much larger than the amount of revenue that we still might be looking at a bubble, like we're investing in a $1 trillion economic market as if it's a, say, $10 trillion economic market.

So that's where I think it's worth being very specific here.

And fortunately, your analysis is very specific.

You've said there is no one way to answer the question, is AI a bubble?

In fact, there are five ways.

There are five distinct tests.

And what I want to do in the rest of our time together is go through each of those tests.

So you define these tests as, and folks might not remember it as I say it now, but they'll remember it later.

economic strain, industry strain, revenue growth, valuation heat, and funding quality.

No need to remember those terms now.