Arthur Hayes, former BitMEX CEO and Maelstrom CIO, says the global AI arms race has triggered a historic surge in fiat credit. He argues Bitcoin is the main beneficiary.
In his latest newsletter, Hayes argues that nation-states treat AI spending as a survival contest. Central banks and commercial lenders, he says, are now funding the build-out indefinitely.
Arthur Hayes Says Credit Channel Replaces Cash Flow
Most US AI capital expenditure has so far come from operating cash flow at the largest software firms. Hayes argues that the source is running out, and bank credit must now fund the next leg.
“The scale of current and future CAPEX spending now requires a growth in funding via the credit channel,” read an excerpt in the newsletter.
In China, President Xi Jinping has steered lenders away from real estate and toward technology. The Federal Reserve and the People’s Bank of China have also eased financial conditions to support the build-out.
Hayes invokes Jevons Paradox to explain why computing demand keeps accelerating even as model efficiency improves.
Researchers at Simple Mining echoed Hayes, describing AI capex as a national-security concern driving Bitcoin demand.
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Pentagon Deals Reinforce the Narrative
White House AI and Crypto Czar David Sacks has been amplifying the same message, estimating AI capex will deliver a 2% tailwind to US GDP growth this year.
Sacks cited a Morgan Stanley note suggesting the contribution could climb above 3% next year.
“Stopping progress in AI would be equivalent to halting the US economy,” he noted.
The national-security framing gained further weight on May 1. The Department of Defense signed AI deployment deals with eight major contractors. The list includes Google, Microsoft, Amazon Web Services, Nvidia, OpenAI, Reflection AI, SpaceX, and Oracle.
Bitcoin advocate Simon Dixon called the sequence a manufactured crisis used to justify emergency money creation.
“The US national debt will pay for the AI bailout, and the energy companies will profit from it. A crisis is needed to justify the Fed’s bond purchases. A narrative is needed to allocate the capital in an emergency. Hence the national security and China AI arms race narrative,” he explained.
Bubble Risks and the Bitcoin Trade
Hayes does not view the expansion as durable. He warns that an oversized AI public offering or merger could end the mania. Anti-AI rhetoric from a 2028 Democratic challenger could pressure capital allocators well before then.
Rising electricity and commodity costs may also draw populist backlash heading into the November US midterm elections.
Until those checks arrive, Hayes expects fiat supply to keep climbing. He says Bitcoin bottomed near $60,000 earlier this year. He now believes Bitcoin returning to $126,000 is almost certain.
He expects acceleration once the price clears $90,000 and short sellers are forced to cover.
Investors are watching AI infrastructure spending, central bank policy, electricity markets, and upcoming technology IPOs for early signs the cycle is turning.
Until one of those signals appears, Hayes argues the path of least resistance for Bitcoin is up.
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