Value Investing Guru Warns: AI Bubble May Burst, SpaceX is Nonsense, Bitcoin Will Go to Zero

Author: HIBIKI, Crypto City

Jeremy Grantham Critiques SpaceX Narrative and Bitcoin Valuation

Famed value investing guru Jeremy Grantham warned on the "Diary Of A CEO" show four weeks ago that the market is experiencing the largest AI investment bubble in history. He harshly criticized Elon Musk's SpaceX Mars colonization plan as "nonsense" and predicted that Bitcoin's ultimate value will inevitably go to zero.

AI Bubble May Burst in a Few Years

Grantham pointed out on the "Diary Of A CEO" show that AI is a once-in-a-century major invention, comparable in significance to the internet.

However, the largest bubbles in history often accompany significant technological innovations. The irrational influx of capital has led the U.S. into its largest investment bubble ever.

He noted that the tech giants have poured hundreds of billions of dollars into the race for dominance, but ultimately only a few companies will survive. The bubble may burst in the coming years, with popular AI tech stocks facing declines of up to 70%, reminiscent of the 2000 internet bubble. He also expressed concern that if AI development goes out of control, it could lead to catastrophic consequences.

Critiques SpaceX as Nonsense, Mars Colonization is Unrealistic

Regarding SpaceX, Grantham's unrelenting criticism is that it represents "extreme market madness." He criticized claims of asteroid mining or market sizes reaching a quarter of global GDP as completely fanciful nonsense. People a century from now will view SpaceX much like modern people view the "South Sea Bubble."

That said, Grantham is also an early investor in SpaceX. He admitted that Musk is a genius at using narratives to inflate valuations, just as he did with Tesla, using "nonsensical stories" to inspire investor confidence and drive up valuations, which he then used to raise funds to build factories and infrastructure. However, he believes the Mars colonization plan is essentially a "one-way ticket with no return."

Considering that SpaceX's development of AI and robotics will lead to massive energy consumption and risks, he privately hopes that some of SpaceX's plans will ultimately fail, allowing humanity more time to address the risks of uncontrolled technology.

Bitcoin is Destined to Go to Zero, Lacks Practical Utility

On the topic of cryptocurrencies, Grantham emphasized that he has never held or recommended buying Bitcoin. He bluntly stated that Bitcoin lacks intrinsic value, with its only function being to assist criminals in transferring funds, and he believes it will ultimately go to zero.

Grantham pointed out that Bitcoin's price volatility is too extreme; for example, it plummeted from $120,000 to $60,000 in a short period, making it completely unsuitable as a store of value or medium of daily transactions.

He stressed that even in a stable economy, Bitcoin can still halve in value for no reason, proving it is not a stable asset, and its long-term performance is even worse than gold, ultimately fading into obscurity and dropping to zero over decades.

This aligns with his previous views expressed in an interview with CNBC. He believes that the biggest risk for Bitcoin in the future may not be a sharp crash in a short time, but rather a prolonged and slow process of value loss after market enthusiasm gradually wanes.