WSJ What’s News: "Should Markets Worry About an AI Bubble?"

Date: November 21, 2025
Host: Asa Fitch
Guest: Robbie Whelan (WSJ chips reporter)
Special Audio: Lisa Su (CEO, AMD); Jensen Huang (CEO, Nvidia)

Episode Overview

This episode breaks down the most recent earnings season with a focus on the semiconductor industry, particularly companies at the heart of the artificial intelligence (AI) boom like Nvidia and AMD. Host Asa Fitch and chips reporter Robbie Whelan examine whether the current investment explosion around AI could be forming a bubble, what’s driving extraordinary demand for AI chips, and why markets remain volatile despite record financial results. The discussion also explores the relationship between chipmakers, manufacturers, and their big tech customers—especially given concerns around profitability, business models, and the sustainability of AI investments.

Key Discussion Points & Insights

1. Insatiable Demand for AI Chips

• The AI boom has established semiconductors as the "picks and shovels" of the era; companies like Nvidia are seeing enormous demand.
• Quote:

  "There's a real belief that AI compute really equates to intelligence. So if you have the chance... to put on more compute, you're going to do it because it's going to give you incremental advantage."
  – Lisa Su (CEO, AMD) [01:30]

2. Record-Setting Earnings Amid Volatility

• Nvidia’s latest earnings "pleased a lot of investors and helped settle markets," even though its stocks and those of similar AI companies have experienced significant volatility.
• The market is driven by record demand, though fears of overspending and a potential bubble persist.
• Insight:

  "All signs seem to be pointing towards what really can only be described as record demand."
  – Robbie Whelan [01:59]

3. AI Market Jitters: Why the Volatility?

• Drop in AI-related stock prices is partly due to:
  • The relatively limited number of major buyers (mostly large, resource-rich tech companies).
  • Opaque deal structures involving "circularity"—where chipmakers invest in their own customers, creating unclear revenue origins.
• Quote:

  "We have this word that’s become a buzzword... circularity. Companies like Nvidia have been gravitating towards deals where essentially... money out the door comes back to them... So when the market sees this... where is the revenue going to come from and more importantly, when is it going to come?"
  – Robbie Whelan [02:47]

4. The Role of Manufacturers and Foundries

• Nvidia and AMD design chips, but the actual manufacturing is done by contract foundries—mainly TSMC. This segment is also thriving.
• Intel, an exception with its own foundry business, is seeing some resurgence largely because of government investment.
• Quote:

  "Nvidia earlier this year passed this milestone where they became the world's first $4 trillion company. And a few months later they became the world's first $5 trillion company."
  – Robbie Whelan [04:05]

5. The Weak Link: AI Product Buyers

• The customers—the big tech giants (Microsoft, Google, OpenAI, Anthropic)—are buying vast quantities of AI chips, but their products are not yet generating substantial revenue.
• Insight:

  "All the products they're designing... are, generally speaking, not making much money, if any, at this point... we’re still a long way off from... meaningful repeating income."
  – Robbie Whelan [05:43]

6. Bubble Dynamics: Size of Outlays vs. Revenue

• Example cited: Nvidia posts $57 billion in quarterly revenue, while OpenAI is losing $50 billion a year, yet is among Nvidia's principal customers.
• Reflection:

  "We're in this mode where it's spend, spend, spend, but we don't have the money coming in the door from the sales or subscriptions to AI products..."
  – Robbie Whelan [05:43]

7. Is There an AI Bubble? Industry Perspectives

• Jensen Huang (Nvidia CEO) downplayed bubble fears, saying their business looks fundamentally strong from the inside.
• Quote:

  "From our vantage point, we see something very different."
  – Jensen Huang [07:13]

8. Future Signals: How Will We Know If It's a Bubble?

• Watch the "middlemen"—companies that rent or resell compute (like CoreWeave, which recently lost 40% of its market value).
• The sector is hypersensitive to minor disruptions, a classic symptom of speculative fervor.
• Quote:

  "When you have... the littlest disruption to that business model can cause just like huge amounts of disjunction. So that's the kind of thing I'm watching, this heightened volatility."
  – Robbie Whelan [07:32]

Notable Quotes & Memorable Moments

• Lisa Su (AMD CEO, on demand for AI compute):

  "There's a real belief that AI compute really equates to intelligence. So... it's really, I would say, an insatiable demand for AI compute." [01:30]

• Robbie Whelan (on circularity and transparency):

  "Why do we have to do the deals these ways that are somewhat worrisome structures of the deals, but also where is the revenue going to come from and more importantly, when is it going to come?" [02:47]

• Jensen Huang (Nvidia CEO, on bubble fears):

  "From our vantage point, we see something very different." [07:13]

Important Segment Timestamps

• 00:18–01:11 – Introductions and AI chip sector context
• 01:30–01:54 – Lisa Su (AMD) on insatiable AI compute demand
• 01:59–02:23 – Robbie Whelan on record-breaking chip demand
• 02:47–03:57 – Market volatility and 'circularity' financial deals
• 04:05–05:39 – Overview of chip manufacturing, TSMC, Intel’s challenges
• 05:43–06:36 – Tech giants as customers, profitability issues
• 06:36–07:10 – Revenue/spending mismatch; Nvidia vs OpenAI finances
• 07:13 – Jensen Huang (Nvidia) addresses AI bubble speculation
• 07:32–08:08 – What to watch for as AI bubble signals (middlemen, volatility)

Summary Flow and Tone

The episode offers an incisive, cautious but nuanced look at the current AI investment boom. Despite spectacular sales and valuations in chip companies like Nvidia, structural worries—such as unclear end market profitability and speculative deal structures— are causing volatility and keeping bubble debates alive. The tone is analytical and slightly skeptical but not alarmist: all voices emphasize the real long-term value in AI tech while acknowledging the market’s feverish, sometimes unsteady progress.

This recap should equip anyone who missed the episode with a clear understanding of the key trends, market dynamics, and future signals to watch in the AI and semiconductor sectors.