Ari Paul, co-founder and chief investment officer of BlockTower Capital, posted on X today, November 7, 2026, that he believes the “medium time frame AI bubble burst.” Paul suggested that while “excess leverage (at the equity market level) is gone,” AI names could still see “another 20% -35% decline in AI names as the “blood on the streets.”” He clarified this analysis is within a medium-term context of less than three years.
The AI sector has seen rapid growth and significant investment over the past few years. Major tech companies like Nvidia, a key player in AI hardware, have experienced substantial rallies. While the provided live prices show some tech stocks moving up or down today, the broader market context has recently included concerns about equity market performance, as noted in recent coverage about the S&P 500 dropping 4.4 percent.
Paul's view implies that despite the initial burst, the AI market may not have bottomed out, suggesting a period of sustained downward pressure on related equities. He also pointed to “tons of excess leverage in the AI debt markets that could create crisis,” even mentioning “rumors floating of an Anthropic nationalization as a potential necessity in a year for example, to avoid full on bankruptcy.” Paul noted he recently bought his first AI stock in a small size while continuing his analysis.
