AI’s Momentum Crowd Just Got Flushed Out. That’s a GOOD ThingGRAHAM SUMMERS JULY 6, 2026
https://dollarcollapse.com/ais-momentum-crowd-just-got-flushed-out-thats-a-good-thing/Quote:
The AI trade got obliterated last week due to two reasons:
Meta (META) announced it would be launching a cloud service to rent out its surplus AI infrastructure.
Someone leaked that OpenAI engineers told colleagues internally in June that they’d found a software-only optimization that cuts inference costs by more than 50% on certain models.
In simple terms, META has been extremely aggressive in its AI buildout efforts. In this context, the fact that META is now stating that it has surplus AI infrastructure suggests the company has overestimated the actual demand for its AI services. Given how important META has been as an AI hyperscaler, this has very negative implications for AI demand as a whole.
AI-related companies, particularly those involved in infrastructure (Coreweave, Nebius, Micron Technology, Marvell Technology, etc.) collapsed 5%-10% in a single day. This is one of the big issues with hot money/momentum plays: the momentum goes both ways.
Thus, the AI trade was hit by two major issues last week. One (META) suggested that there is an oversupply of AI-related infrastructure while the other (OpenAI) suggested that there might in fact be a shortage of demand for AI-related infrastructure.
Oversupply + less demand = a bearish outlook.

Be careful, Be ready, Be prepared.
Buy ammo