Prof G Markets · Friday, July 31, 2026
Jim Chanos drew parallels between current AI capital spending and the dot-com era, noting that in the late 90s, spending was by profitable telecom companies. He contrasted this with the current AI spending, which is more concentrated among hyperscalers and AI companies, leading to greater risk.
“Well, if we go back to the dot-com analogy, um, most of the spending that was done, and Scott knows this, is back in the late 90s was by enterprise, and and by relatively profitable telecom companies who were networking their systems together to take advantage of the internet.”
“So, um, a lot of the capital spending budgeting and spending was by fairly profitable companies.”
“What happened in the dot-com era was that they just got too optimistic in terms of how much they needed, and order books collapsed, beginning in late 2000 into 2001.”