Tech stocks rebounding here after three straight days of losses as investors brace for any signs

of an AI bubble. But could the private AI markets be the source of any froth?

Adir DeBosa digs into that for today's tech check. Happy Friday, Dee.

Hey, happy Friday, Carl. So yes, if you are worried about a bubble in AI, you really can't

ignore what's happening in private markets because startup losses, they are the engine of

this boom. Every dollar they burn on compute turns into revenue for Microsoft, Amazon,

Nvidia, and others creating this cycle where private losses sustain public profits.

Now, mega cap earnings, yes, they're booming.

That is an argument for the Bulls, but it is being propped up by these startup losses,

which are increasing. Now, there's of course the obvious players. We talk about them all the time,

Open AI and Anthropic, two of the largest that are spending big on chips and data centers

supplied by Mega Cap Tech losses in the tens of billions.

Increasing, though, there's another rising cohort of unprofitable and in some cases productless

startups funding the boom. Yesterday alone, AI startups cursor X OpenAI, CTO Miramaradi's

thinking machines, Elon Musk's X AI, raising billions upon billions of dollars.

Cursor is now to nearly $30 billion valuation, yet just a billion in annualized revenue.

This one is a great example of how startup burn flows upstream.

Cursor spends millions on models like Anthropics Cod for AI First coding for its customers,

which in turn pays big tech for compute.

Now, these startups and dozens more like them, they're spending heavily on compute.

That money flows back to big tech, feeding those same earnings that keep the public AI trade

afloat.

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