Former BitMEX CEO Arthur Hayes is betting that the artificial intelligence boom will eventually produce a familiar outcome: too much investment, a crash and, ultimately, a bailout that sends crypto higher.
Hayes, co-founder and chief investment officer of crypto investment firm Maelstrom, said in response to questions from CNBC at the Gamma Prime Investing Conference in Singapore that humanity is "wasting multi-trillion dollars" on building AI data centers.
The massive data center buildout would ultimately make computing power "extremely cheap and extremely plentiful," Hayes said.
The bet runs against the massive investment pouring into AI infrastructure, as technology companies race to secure the computing power needed to develop and run increasingly advanced AI models. Hayes sees that buildout eventually becoming overcapacity, setting the stage for a downturn that he expects will ultimately benefit crypto.
"If you study financial history and you study every single major technological rollout, it always is overbuilt. There always is a crash, and there always is a bailout," Hayes said.
Investors who position for those bailouts stand to benefit, Hayes said, pointing to the aftermath of the 2008 financial crisis and other episodes over the past two decades.
"Thankfully, we have bitcoin and other crypto to soak up that excess liquidity, and so we know the asset that's going to perform the best when the bailout comes," Hayes said, adding that "you just have to be patient."
SpaceX, OpenAI and Anthropic are among the end users driving demand for computing power, and none of them makes money, Hayes said. Once the data centers currently under construction are completed, infrastructure providers will seek payment for the compute those companies have committed to, he said.
That could come in late 2027 or 2028, when much of the new data center capacity is delivered, according to Hayes.
The bull case is that AI becomes "so useful" over the next 12 months that demand grows enough for AI companies to become profitable, Hayes said.
Some companies supplying the AI boom are already making money, Hayes said, pointing to memory chipmakers and Nvidia. The question for investors is whether they are paying the right multiple for those companies' forward earnings, he added.
Hayes also said he does not like betting on falling prices or shorting AI companies, calling it "not really a great investment opportunity," but added that major technological rollouts have historically been overbuilt.
The abundance of computing power created by the AI buildout is also behind Hayes' latest crypto venture, Flop, an AI-agent payments project expected to launch in the first quarter of 2027.
Cheaper and more plentiful computing power would allow AI agents to proliferate, Hayes said.
His new project, Flop, aims to create a spot market for computing power, where participants are rewarded with Flop tokens for providing GPUs and performing AI inference.
There is currently no payments network for AI agents, Hayes said. Flop aims to create a spot market for compute.
"If agents can convert a currency directly into compute, which is what they eat and consume, then they will use this currency," Hayes said. "That's our bet."