Arthur Hayes: AI Slowdown Could Benefit Bitcoin

BitMEX co-founder Arthur Hayes believes a recent "Safety First" pause in AI development, advocated by major labs, is less about existential risk and more about weak demand for AI products at current costs. He argues this slowdown could create a glut of computing power, driving down operational expenses for AI.

Hayes connects this potential compute surplus to a massive debt burden tied to AI infrastructure investments, totaling over $1 trillion in investment-grade debt and hundreds of billions in lower-quality loans. He suggests that if AI training spending is curtailed under the guise of safety, this debt will remain, potentially leading to downgrades and a financial crisis that could necessitate government intervention.

The BitMEX co-founder posits that such a scenario could force the US government to either become a direct buyer of compute resources for national security reasons or inject liquidity into the financial system to bail out insurers. In either case, Hayes anticipates that Bitcoin and the broader crypto market will benefit from increased liquidity and a flight to perceived safe havens. He notes that this perspective aligns with his previous calls for renewed money printing by central banks in response to financial market stresses.