Musk Warns AI Riptide Is Already Underway, Global Capital at Risk

Musk warns:

The AI riptide is already underway.

Over the past year, global AI inference token usage has increased 25-fold.

In response, Ark Invest’s Chief Futurist, Brett Winton, made a startling statement, describing an unexpected scenario he envisioned:

The payback period for AI infrastructure investments is astonishingly short, and the internal rate of return is ridiculously high—even at scales that seem unimaginable. This force will directly drive up the cost of capital and drag a large number of traditional enterprises into decline.

Musk shared this viewpoint and commented as mentioned above.

To truly understand why Musk used the term “riptide” at this moment, we must first grasp his latest assessment of humanity’s technological endpoint—AGI (Artificial General Intelligence) and the technological singularity.

The danger of a rip current lies in its deceptive surface—calm and serene—while beneath, a powerful undercurrent is already pulling everything irreversibly toward the deep ocean or far out to sea.

The "tsunami" Musk referred to is far more than just an upgrade of a few chatbots.

He has issued multiple warnings that were almost countdowns:

In a very short time, AGI will likely be smarter than the smartest human on Earth; and beyond that, the total digital computing power on the planet will exponentially surpass the combined biological computing power of all human brains.

This is the suffocating "Singularity."

Once this threshold is crossed, AI will gain the ability to self-iterate and self-evolve, and human technological progress will no longer be driven by humans themselves, but taken over by superintelligent machines, resulting in a vertical, explosive surge.

"The wave of AI has arrived," and Musk is confirming that the singularity is drawing near.

Everyone realized that AGI was no longer a science fiction concept decades away, but something that could be achieved within one to two years simply by scaling up computing power, energy, and data—and the global flow of capital instantly underwent extreme distortion.

Under the immense gravitational pull of the singularity, the "inference token usage" of large AI models increased by approximately 25 times within just one year.

The total supply of OpenRouter tokens doubles approximately every 11 weeks.

Please note that it is 25x, not 25%.

Cathie Wood predicts that token usage is growing exponentially and permeating the entire economy, likely pushing annual real GDP growth into double digits—a phenomenon that many individuals and companies simply cannot comprehend.

Because most investors have never experienced growth of this magnitude—25x—in their lifetimes, their brains automatically interpret "25" as "25%."

A 25% growth rate is indeed remarkable over the course of history. But a 25-fold increase belongs to an entirely different investment universe: it means 100 units don’t gradually rise to 125—they instantly surge from 100 to 2,500!

Cathie Wood further pointed out:

The world’s most advanced AI labs have seen their annual revenue explode by 5 to 10 times within just six months to a year; even traditional, established companies that have aligned themselves with the AI revolution have seen their previously steady revenue growth rates forcibly lifted from 25% to 30% or even above 40%.

Faced with this钞票印制机级别的 growth on the eve of a singularity, countless traditional entrepreneurs are like "deer in the headlights"—faintly sensing the ground shaking and blinding light, yet their minds simply cannot process information at this scale, leaving them frozen in place.

Since the path to AGI has become clear, the countdown to the singularity has begun,

Next, the pure instinct of capital to seek profit kicked in.

This is the core insight proposed by ARK's Chief Futurist, Brett Winton: capital reallocation and the crowding-out effect.

The global pool of capital is limited over any given period. Money flows where returns are highest and payback periods are shortest.

Brett Winton noted:

The payback period for AI infrastructure investments is growing shorter, and internal rates of return (IRR) are extraordinarily high. As long as this level of return persists, capital will continue flowing into GPU manufacturers, data centers, and AI companies.

In today’s venture capital market, unless your business plan is filled with AI and computing power, you simply won’t raise funds.

Funds from the primary market have already created an extreme "AI suction effect." But this is just the beginning—this trend is rapidly spreading downstream.

To prepare for AGI, building a super AI data center requires massive funding.

In addition to using their own capital, major players also issue large amounts of debt. Normally, issuing debt requires paying interest. However, for builders of AI data centers, the current market faces extreme shortages in computing power—once built, these facilities have no trouble finding buyers and generate extremely high profits. As a result, they can easily afford, and even welcome, higher financing costs.

Even more astonishing, NVIDIA’s chips have now become “hard currency”—any data center that purchases equipment from NVIDIA’s ecosystem can directly use these chips as collateral for loans.

Extremely high returns, strong tolerance for high interest rates, and collateral akin to hard currency have transformed computing power infrastructure into what Wall Street views as a new asset class—more stable and with investment-grade characteristics.

This is a "capital black hole," not only devouring the money of equity investors but also wildly consuming funds from global bond markets.

And the global pool of capital is limited.

When the AI pump drains most of the water from the pond, available capital in other industries is temporarily depleted.

First, the high returns in the AI sector have raised expected returns across the entire market, causing financing costs for traditional companies to surge—or even making it impossible to secure funding at all.

Step two: Capital in the secondary market votes with its feet—stocks unrelated to AI are removed from institutional core holdings, resulting in valuations halving and liquidity drying up.

Step three: maturing debt must be refinanced at higher interest rates, worsening interest coverage ratios and crushing companies with fragile cash flows.

Step four: Where capital flows, talent follows. Traditional industries are trapped in a spiral of "no money—unable to retain talent—inefficient operations—even less money."

Elon Musk fully agrees with this.

Cathie Wood's summary is: Market sentiment is shifting from the initial blind frenzy over "AI hype" to individual stock-by-stock reactions of "Oh no" and "Oh yes."

Musk replied below with three words: "You are right."

I eliminate you, and it has nothing to do with you.

In the business world, this statement is about to become the most real scenario:

AI is eliminating many traditional businesses—not because it understands better than you, but because it completely drains the capital oxygen that sustains your survival.

Throughout human history, every leap in productivity has been accompanied not by a gentle transition, but by bloody reallocation of resources.

When the steam engine replaced horse-drawn carriages, not only did coachmen lose their jobs, but more importantly, the capital previously invested in stables and feed suddenly flooded into railways and steel mills.

When the mobile internet exploded, not only did traditional media decline, but trillions in venture capital suddenly withdrew from traditional channels overnight, giving rise to the giants of the mobile internet era.

Today, the intensity of the AI riptide will be ten to a hundred times greater than that of the Industrial Revolution and the Internet Revolution.

As Cathie Wood said: "Facts are stubborn things."

Capital doesn't show favoritism—it has already made its choice and is voting with its feet at a rate of tens of billions of dollars per day.

A massive wave has risen, and bright light has illuminated the night.

Reference materials:

https://x.com/CathieDWood/status/2093739536509436149https://x.com/MaxForAI/status/2093775774402969662

https://x.com/wintonARK/status/2093403858890629434

This article is from the WeChat public account "New Intelligence Yuan" (ID: AI_era), authored by David.