Shares across the AI infrastructure complex are trading mixed midday Wednesday after well-known short seller Jim Chanos publicly compared today’s artificial intelligence capital spending boom to the 1999-2000 telecom build-out. NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) stock is on the radar, along with several names Chanos flags as “equipment leasing.” Among the potentially vulnerable stocks in this discussion are CoreWeave (NASDAQ:CRWV), Nebius Group (NASDAQ:NBIS), Taiwan Semiconductor Manufacturing (NYSE:TSM), and Vistra (NYSE:VST).
The man issuing the warning has a notable track record. Chanos founded Kynikos Associates and is known for calling out Enron, and his “same setup” framing has investors revisiting valuations across AI compute, cloud, foundry, and power. Broadcom (NASDAQ:AVGO) sits in the same vendor camp the thesis touches.
Chanos Argues It’s the Same Dot-Com Setup
In an iConnections interview summarized by Podcast Alpha, Chanos walks through how S&P 500 earnings rose 30% over two years from 1998 to 2000, then fell 40% in 12 months during a mild recession. His point: the earnings swing wasn’t really driven by the recession. Rather, it was the telecom buildout collapsing as companies realized they’d ordered roughly 10,000 routers when they needed 2,000.
According to Chanos, the AI capital expenditure boom has “identical mechanics.” He contends that NVIDIA’s earnings are “CapEx boom output” and that S&P 500 estimates are rising fast because infrastructure spending flows directly into a small number of vendors. If order books get pulled, the snapback could be quick.
The bullish counterargument is worth noting. NVIDIA just posted 85% year-over-year revenue growth with Data Center revenue of $75.25 billion, and CEO Jensen Huang has called the buildout “the largest infrastructure expansion in human history.” NVIDIA also has $119 billion in supply-related commitments, which suggests visibility well beyond a quarter.
His Specific Targets: CoreWeave, Nebius, and Power Plays
Chanos reserves his sharpest critique for AI cloud lessors. He argues that CoreWeave and Nebius are essentially equipment-leasing businesses generating mid-to-high single-digit pre-tax returns on capital, and shouldn’t trade at higher multiples than NVIDIA and Taiwan Semiconductor, which control GPU supply.
The numbers add color. CoreWeave stock carries a price-to-sales ratio of 9.35, with return on equity of -41% and a $740 million net loss in Q1 2026. Nebius stock trades at a P/E ratio of 100x against negative EBITDA, yet CoreWeave’s backlog has swelled to $99.4 billion.
On power, Chanos argues alternative-energy stocks trading at 50 to 70 times earnings as data-center power plays will revert once U.S. permitting bottlenecks resolve in 2 to 3 years, noting power is only 5% to 7% of data center revenues. Vistra stock trades at a P/E ratio of 26x, but the company has signed long-term power purchase agreements (PPAs) with Meta Platforms (NASDAQ:META) at PJM Interconnection nuclear sites.
SpaceX Valuation and the Broader Critique
Chanos extends the bubble framing beyond public AI names. He notes that SpaceX (NASDAQ:SPCX) IPO’d at about 90 times revenue on a roughly $2 trillion valuation, with core Starlink mobile supporting at most a couple hundred billion in value, leaving roughly $1.5 trillion tied to business models that do not yet exist. That’s his frame for stretched expectations across the AI complex.
It’s worth emphasizing that this is one prominent skeptic’s thesis on names like NVIDIA, CoreWeave, and Nebius. Timing short calls is notoriously difficult, and AI demand has been durable so far. Investors can weigh both sides without treating either as a certainty.
What to Watch From Here
The next anticipated catalysts are concrete. NVIDIA hosts its next earnings call on August 27, where any hint of softening order books would land hard. Broadcom has guided Q3 FY2026 AI semiconductor revenue to grow over 200% year over year to $16 billion, a number that will test the demand narrative directly.
For now, the market isn’t endorsing the Chanos call. Investors can watch for whether AI cloud lessors keep raising capacity commitments, and whether NVIDIA’s supply book translates into the customer concentration that worries short sellers. The bull case rests on bookings holding; the bear case rests on them not.
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