The Market is Waking Up: Elazar Advisors Featured on CNN and Reuters Regarding the AI Bubble
- Nov 23
- 6 min read
By Elazar Advisors
The financial world is reaching a tipping point. We have been warning our subscribers about a specific, fundamental risk building within the Artificial Intelligence narrative. Now, the mainstream media is picking up on our call.
Recently, we published a deep dive into the 400% Growth Paradox, outlining why the future of the stock market is precariously dependent on loss-making AI startups.
This week, Elazar Advisors, LLC was highlighted in both Reuters and CNN International regarding the recent Nvidia earnings report and the potential for an AI bubble burst.
Here is a look at what we told the press and why this matters for your portfolio right now.
As Seen In Reuters: The Profitability Problem
In a recent Reuters feature discussing whether AI is a "Tipping Point or a Bubble," we pointed out that the market’s current valuation is being propped up by circular spending rather than organic profit generation.
Chaim Siegel, founder of Elazar Advisors, told Reuters:
"A lot of this growth is coming from loss-making startups or loss-making projects, so most likely the cycle ends badly unless all these companies agree to stop spending together and let profits shine through, which is a near impossibility."
The core issue remains: The spending is massive, but the profits from the end-users of this technology have not yet materialized.
Live on CNN: "A Game of Musical Chairs"
Following the Reuters coverage, CNN International reached out to discuss the market reaction to Nvidia's earnings. Chaim Siegel joined anchor Kim Brunhuber to discuss the "Mag 7," the circular funding of OpenAI, and how investors can identify when the bubble is actually popping.
Watch the interview via SnapStream here or read the full transcript below.
Interview Transcript: Is the AI Bubble About to Burst?
Host: Kim Brunhuber (CNN International) Guest: Chaim Siegel (Founder, Elazar Advisors)
Kim Brunhuber: All right, I want to bring in Chaim Siegel, founder of Elazar Advisors, who joins us live from Jerusalem. Thank you so much for being here with us, we really appreciate it. So, you've seen bubbles come and go. When you look at what is happening with AI right now, does this feel like the Dot-com era all over again?
Chaim Siegel: Well, I wasn't around for the Tulip Mania, but I was around for the Dot-com bubble. There are similarities. These things can go on for a while; you just need something to eventually pop the bubble. The pieces are in place because there is a lot of spending on AI, but there are no profits so far. That is the big problem.
Kim Brunhuber: Yeah. Nvidia just posted those incredible numbers that I read out earlier, but the stock still dropped afterward. We’ve seen big investors dump their stock. What does that tell you about where investor confidence really is right now?
Chaim Siegel: Well, I don't know if investors have dumped all their stock. I think everybody is still "in" on the AI theme. Everybody is in on Nvidia—it is one of the biggest companies in the world on the major exchanges—so everybody remains very bullish on it.
However, I will say something interesting regarding a popular hedge fund survey from Bank of America. It shows that everybody is "in," everybody is bullish, and fully invested—but everybody also thinks it is an AI bubble.
It basically turns into a game of musical chairs. Everybody has their finger on the trigger to sell, but nobody wants to sell yet because you don't want to miss that final run-up—that euphoric run-up that sometimes happens in these scenarios.
Kim Brunhuber: Yeah, well, Peter Thiel’s timing on it is a little interesting; he was one of those people who did dump his stock recently. We keep hearing about these circular funding deals where Nvidia is investing in companies like OpenAI, which then turn around and buy Nvidia chips. It seems pretty cozy. All these companies' fates are kind of tied together. Does that worry you?
Chaim Siegel: Yeah, that's a good point. I would say after last quarter's earnings—specifically Microsoft's—that becomes clear. Microsoft has a line item labeled "other income," which is now mostly OpenAI. The losses are building there; they doubled from the last quarter to the most recently reported quarter. If you get a double every quarter, it’s going to grow 300% or 400% every year.
That spending is OpenAI spending on cloud services and Nvidia’s GPUs, but there are only losses there. Microsoft is the one investing in OpenAI, so Microsoft's revenues are going up because OpenAI is buying their cloud service. Microsoft is giving OpenAI capital, and in return, they are getting an investment percentage of OpenAI.
So, exactly like you're saying, there is a big circular driver here. Microsoft's accelerated revenue is likely from OpenAI. Amazon's accelerated revenue is probably from [their investment] Anthropic. And Oracle, announcing the same $500 billion backlog number as Nvidia, is most likely very heavily tied to OpenAI. Yet, OpenAI has no profit, no profit target, and no profits to expect in the near term.
Kim Brunhuber: So all of that adds to the fears that if one goes down, it could drag the rest of them with it. Before we go, let's look at why this matters. Many regular folks out there with retirement accounts may not realize how exposed they are to tech stocks. What is your advice to people at home who are getting nervous about this bubble potentially bursting and affecting their retirement savings, but who also don't want to miss out on the potential gains you were talking about?
Chaim Siegel: Sure. I will simplify everything we just said. It looks like the "Magnificent Seven"—the Mag 7—and all the major tech companies are really being driven by a capital infusion cycle into OpenAI. Because the whole stock market is driven by the Mag 7 leaders, and their revenue acceleration is driven by OpenAI, everybody is pretty much invested in this in a meaningful way.
If OpenAI is successful, great, but they have no profit target. This is where the risk comes from.
Now that we've identified that there is risk in the market, it comes down to identifying a "technical break," which is about watching chart patterns. I would say there is enough risk that if the market is down 5% in one day, and you see it down 3% another day, something has changed.
Everybody's finger is on the trigger at the big institutions, and that can cause a cascade. However, if you don't see those big "down days," we are still in a bull market. Bull markets are smooth, steady, boring, and sleepy. They go up 1% or 2% a day, or down 1% or 2% the next day—that’s not a big deal. But if you see 5% down days, something has changed, and people should be a little bit more cautious.
Kim Brunhuber: Yeah, let's hope for smooth, steady, and boring because we've been through the alternative and it is not fun. Chaim Siegel, thank you so much for speaking with us.
Don't Miss The Signal
As we discussed on CNN, the market is currently in a fragile state of "Musical Chairs." The institutional investors are fully invested, but they have their fingers on the sell trigger.
Identifying the difference between a typical down day and a "technical break" is difficult for even seasoned investors. Don't be the last one standing when the music stops.
We monitor these signals in real-time, helping our subscribers navigate the volatility to protect their capital, but we also want to capture upside without trying to get trapped in the bubble.
Would you like to know how we are approaching and timing this in real-time?
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This post was AI-assisted.
Disclaimer: All investments have many risks and can lose principal in the short and long-term. Options have even more risk and should be fully understood before entering. The information provided is for informational purposes only and can be wrong. By reading this you agree, understand, and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless. Opinions given are at this moment and can change after this is published. If our calls are made public (outside the service) we may or may not update our opinions publicly.