SINGAPORE, Oct. 7, 2026 | Arthur Hayes, the BitMEX co-founder turned crypto investor, said Wednesday that humanity is "wasting multi-trillion dollars" building AI data centers. He argued the spending will end in a crash and a government bailout, and that Bitcoin and his own AI-compute token project, Flop, are positioned to benefit.
Hayes, co-founder and chief investment officer of crypto investment firm Maelstrom, made the remarks at a conference in Singapore, according to CNBC. He also said none of the major end users of the new capacity, which he named as SpaceX, OpenAI and Anthropic, is currently profitable.
Hayes's Case: Overbuilt, Then Bailed Out
Hayes rested his argument on financial history. "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," he said, per a Yahoo Finance report of the talk.
He expects the data center construction boom to leave behind abundant, cheap computing capacity, while burdening the companies that built it with heavy financial obligations. He put the arrival of the new capacity at late 2027 or 2028. For investors, he said Bitcoin should benefit when bailouts inject new liquidity, and advised them to "be patient" in positioning ahead of it.
The Spending Numbers Behind the Warning
The scale of the build-out is real. Brookings Institution research cited in coverage of the talk projects $10.3 trillion in AI infrastructure spending between 2025 and 2032. By Brookings' math, the sector would need roughly $3.7 trillion in annual revenue by 2032 to deliver a 10% return on that investment.
Hayes has made a related case in recent weeks. In a Substack essay reported by Webull's news feed, he called the AI boom a credit bubble rather than a technology bubble. He argued that AI capital expenditure growth will slow in 2027 and contract in 2028, at which point "the weakest credits fail and the government steps in."
What Flop Is
Flop is the crypto project Hayes now leads as CEO of Flop Labs. He announced the role in August, writing that he was "coming out of retirement." The network is billed as a "proof-of-useful-inference protocol" where GPU operators process AI inference requests and are paid in the FLOP token. Hayes says AI agents will need a currency with a direct link to compute.
Per Coin Edition's summary of the tokenomics, the genesis supply is about 2.48 billion tokens, distributed entirely by airdrop with no presale or venture allocation. The airdrop is scheduled for the fourth quarter of 2026, with the network's genesis block planned for early 2027.
Hayes has also been candid about the risk. In a September interview, he said Flop "will be worth little more than a compute marketplace unless AI agents begin transacting on the network."
What to Watch
Hayes is a promoter with a financial stake in the outcome. He runs a fund that is heavily long Bitcoin and leads the token project that stands to gain from cheap compute, so his forecast is an investment thesis, not a neutral analysis. His timeline also gives the market a test: capital spending trends at the large cloud providers through 2027 and 2028 will show whether the contraction he predicts arrives.
Frequently Asked Questions
What did Arthur Hayes say about the AI boom?
Hayes said at a Singapore conference that humanity is "wasting multi-trillion dollars" building AI data centers, and that the overbuild will end in a crash followed by a government bailout. He expects the new computing capacity to arrive in late 2027 or 2028.
What is Flop?
Flop is a crypto project led by Hayes through Flop Labs. It is designed as a payments and compute marketplace where AI agents pay in FLOP tokens for inference. An airdrop is planned for Q4 2026 and the genesis block for early 2027.
Why does Hayes think Bitcoin benefits?
Hayes argues governments will respond to an AI-driven crash with bailouts that inject liquidity into markets, which he expects to lift Bitcoin. This is his own forecast and a position his fund holds, not an established outcome.