A panel discussion on episode 1,089 of This Week in Tech (TWiT) debated sky-high AI valuations and capital allocation, with host Leo Laporte and guests Ian Thompson, Owen Thomas, and Doc Rock. They argued that today’s AI leaders face the same capital-allocation challenge that confronted earlier technology giants.
Their warning centered on Intel (NASDAQ:INTC | INTC Price Prediction), which Thompson described as a company that spent heavily on share buybacks while falling behind in manufacturing technology. With Anthropic reportedly approaching a $1 trillion valuation and OpenAI valued at more than $850 billion, the panel argued that how AI companies deploy capital may matter just as much as how quickly they grow.
Ian Thompson’s Warning About Share Buybacks and Innovation
Thompson’s argument: AI giants risk repeating what he framed as Intel’s defining error. He said Intel “spent billions buying back its own shares to support the share price and let chip manufacturing technology just lie useless. And now they’re paying the price for it.” Thompson added that share buybacks were illegal until Reagan-era reforms in the 1980s.
The market has repriced that thesis in real time. Intel shares closed at $133.99 on June 18, with the stock up 263.12% year to date and 523.5% over the trailing year. CEO Lip-Bu Tan told investors on the Q1 FY2026 call that “the next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic. This shift is significantly increasing the need for Intel’s CPUs and wafer and advanced packaging offerings.”
Intel’s Q1 FY2026 earnings release showed revenue of $13.58 billion, up 7.2% year over year, with Data Center & AI revenue of $5.05 billion (+22% YoY) and Intel Foundry revenue of $5.42 billion (+16% YoY).
Why Anthropic’s $1 Trillion Valuation Matters
According to the panel, Anthropic has edged past OpenAI to nearly a $1 trillion valuation as a privately held company, a milestone a guest called “unprecedented.” The reporter noted that OpenAI counts 1 billion weekly active users and raised financing at an $852 billion valuation, while cautioning that OpenAI’s reported losses are complicated by its nonprofit-to-for-profit conversion and non-cash stock compensation. The guest also said OpenAI has reportedly confidentially filed to go public but may delay the IPO.
How Executive Incentives Can Distort Capital Allocation
Doc Rock connected the buyback debate to executive compensation, citing former AT&T (NYSE:T) CEO Randall Stephenson as an example of misaligned incentives. Stephenson received roughly $48 million in annual salary, while AT&T nearly tanked. Doc Rock and host Leo Laporte argued that buybacks can sometimes reward executives and drive the share price higher without necessarily improving a company’s long-term competitive position.
AT&T, under CEO John Stankey, has pivoted toward fiber and wireless. AT&T’s Q1 FY2026 adjusted EPS came in at $0.57 on revenue of $31.51 billion (+2.9% YoY), with 584,000 internet net adds in the quarter. Management reiterated full-year 2026 guidance for adjusted EPS of $2.25 to $2.35 and free cash flow of $18 billion-plus. The shares closed at $22.01 on June 18, down 9.42% year-to-date and 16.95% over the trailing year. AT&T trades at a trailing P/E of 7 with a dividend yield of 4.95%.
What Investors Should Watch Next
The panel closed skeptical over how much of the headline AI valuations reflects real value rather than “funny money.” The practical question today is whether AI infrastructure leaders are reinvesting in manufacturing capacity, talent, and intellectual property at a pace that justifies private-market valuations, or whether they tilt toward managing shareholder returns before the technology cycle matures. Intel’s foundry buildout and AT&T’s fiber capex offer investors two case studies in how large-scale capital allocation decisions can affect a stock’s long-term returns and competitive position.
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