The Brief

Perhaps nobody embodies artificial intelligence mania quite like Jensen Huang, the chief executive of chip behemoth Nvidia, which has seen its value spike 300% in the last two years.

A frothy time for Huang, to be sure, which makes it all the more understandable why his first statement to investors on a recent earnings call was an attempt to deflate bubble fears.

"There's been a lot of talk about an AI bubble," he told shareholders. "From our vantage point, we see something very different."

Take in the AI bubble discourse and something becomes clear: Those who have the most to gain from artificial intelligence spending never slowing are proclaiming that critics who fret about an over-hyped investment frenzy have it all wrong.

"I don't think this is the beginning of a bust cycle," White House AI czar and venture capitalist David Sacks said on his podcast All-In. "I think that we're in a boom. We're in an investment super-cycle."

White House AI adviser David Sacks speaks onstage during The Bitcoin Conference at The Venetian Las Vegas in January.

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"The idea that we're going to have a demand problem five years from now, to me, seems quite absurd," said prominent Silicon Valley investor Ben Horowitz, adding: "if you look at demand and supply and what's going on and multiples against growth, it doesn't look like a bubble at all to me."

Appearing on CNBC, JPMorgan Chase executive Mary Callahan Erdoes said calling the amount of money rushing into AI right now a bubble is "a crazy concept," declaring that "we are on the precipice of a major, major revolution in a way that companies operate."

Yet a look under the hood of what's really going on right now in the AI industry is enough to deliver serious doubt, said Paul Kedrosky, a venture capitalist who is now a research fellow at MIT's Institute for the Digital Economy.

He said there is a startling amount of capital pouring into a "revolution" that remains mostly speculative.

"The technology is very useful, but the pace at which it is improving has more or less ground to a halt," Kedrosky said. "So the notion that the revolution continues with the same drum beat playing for the next five years is sadly mistaken."

The huge infusion of cash

The gusher of money is rushing in at a rate that is stunning to financial experts.

Take OpenAI, the ChatGPT maker that set off the AI race in late 2022. Its CEO Sam Altman has said the company is making $20 billion in revenue a year, and it plans to spend $1.4 trillion on data centers over the next eight years. That growth, of course, would rely on ever-ballooning sales from more and more people and businesses purchasing its AI services.

There is reason to be skeptical. A growing body of research indicates most firms are not seeing chatbots affect their bottom lines, and just 3% of people pay for AI, according to one analysis.

"These models are being hyped up, and we're investing more than we should," said Daron Acemoglu, an economist at MIT, who was awarded the 2024 Nobel Memorial Prize in Economic Sciences.

"I have no doubt that there will be AI technologies that will come out in the next ten years that will add real value and add to productivity, but much of what we hear from the industry now is exaggeration," he said.

Nonetheless, Amazon, Google, Meta and Microsoft are set to collectively sink around $400 billion on AI this year, mostly for funding data centers. Some of the companies are set to devote about 50% of their current cash flow to data center construction.

Or to put it another way: every iPhone user on earth would have to pay more than $250 to pay for that amount of spending. "That's not going to happen," Kedrosky said.

To avoid burning up too much of its cash on hand, big Silicon Valley companies, like Meta and Oracle, are tapping private equity and debt to finance the industry's data center building spree.

Paving the AI future with debt and other risky financing

One assessment, from Goldman Sachs analysts, found that hyperscaler companies — tech firms that have massive cloud and computing capacities — have taken on $121 billion in debt over the past year, a more than 300% uptick from the industry's typical debt load.

Analyst Gil Luria of the D.A. Davidson investment firm, who has been tracking Big Tech's data center boom, said some of the financial maneuvers Silicon Valley is making are structured to keep the appearance of debt off of balance sheets, using what's known as "special purpose vehicles."

An aerial view of a 33 megawatt data center with closed-loop cooling system in Vernon, California.

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The tech firm makes an investment in the data center, outside investors put up most of the cash, then the special purpose vehicle borrows money to buy the chips that are inside the data centers. The tech company gets the benefit of the increased computing capacity but it doesn't weigh down the company's balance sheet with debt.

For example, a special purpose vehicle was recently funded by Wall Street firm Blue Owl Capital and Meta for a data center in Louisiana.

The design of the deal is complicated but it goes something like this: Blue Owl took out a loan for $27 billion for the data center. That debt is backed up by Meta's payments for leasing the facility. Meta essentially has a mortgage on the data center. Meta owns 20% of the entity but gets all of the computing power the data center generates. Because of the financial structure of the deal, the $27 billion loan never shows up on Meta's balance sheet. If the AI bubble bursts and the data center goes dark, Meta will be on the hook to make a multi-billion-dollar payment to Blue Owl for the value of the data center.

Such financial arrangements, according to Luria, have something of a checkered past.

"The term special purpose vehicle came to consciousness about 25 years ago with a little company called Enron," said Luria, referring to the energy company that collapsed in 2001. "What's different now is companies are not hiding it. But having said that, it's not something we should be leaning on to build our future."

Enormous spending hinging on returns that could be a fantasy

Silicon Valley is taking on all this new debt with the assumption that massive new revenues from AI will cover the tab. But again, there is reason for doubt.

Morgan Stanley analysts estimate that Big Tech companies will dish out about $3 trillion on AI infrastructure through 2028, with their own cash flows covering only half of that.

"If the market for artificial intelligence were even to steady in its growth, pretty quickly we will have over-built capacity, and the debt will be worthless, and the financial institutions will lose money," Luria said.

Twenty-five years ago, the original dot-com bubble burst after, among other factors, debt financing built out fiber-optic cables for a future that had not yet arrived, said Luria, a lesson, it appears, tech companies are not worried about repeating.

"If we get to the point after spending hundreds of billions of dollars on data centers that we don't need a few years from now, then we're talking about another financial crisis," he said.

Circular deals raise even more concern

Another aspect of the over-heated AI landscape that is raising eyebrows is the circular nature of investments.

Take a recent $100 billion deal between Nvidia and OpenAI.

Nvidia will pump that amount into OpenAI to bankroll data centers. OpenAI will then fill those facilities with Nvidia's chips. Some analysts say this structure, where Nvidia is essentially subsidizing one of its biggest customers, artificially inflates actual demand for AI.

"The idea is I'm Nvidia and I want OpenAI to buy more of my chips, so I give them money to do it," Kedrosky said. "It's fairly common at a small scale, but it's unusual to see it in the tens and hundreds of billions of dollars," noting that the last time it was prevalent was during the dot-com bubble.

Open AI CEO Sam Altman speaks during Snowflake Summit 2025 at Moscone Center in June.

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Lesser-known companies are getting in on the action, too.

CoreWeave, once a crypto mining startup, pivoted to data center building to ride the AI boom. Major AI companies are turning to CoreWeave to train and run their AI models.

OpenAI has entered deals with CoreWeave worth tens of billions of dollars in which CoreWeave's chip capacity in data centers is rented out to OpenAI in exchange for stock in CoreWeave, and OpenAI, in turn, could use that stock to pay its CoreWeave renting fees.

Nvidia, meanwhile, which also owns part of CoreWeave, has a deal guaranteeing that Nvidia will gobble up any unused data center capacity through 2032.

"The danger," said the MIT economist Acemoglu,"is that these kinds of deals eventually reveal a house of cards."

Some high profile investors see bubble-popping on the horizon

Some influential investors are showing signs of bubble jitters.

Tech billionaire Peter Thiel sold off his entire stake in Nvidia worth around $100 million earlier this month. That came after SoftBank sold a nearly $6 billion stake in Nvidia.

And in recent weeks, AI bubble pessimists have rallied around Michael Burry, the hedge-fund investor who made hundreds of millions of dollars betting against the housing market in 2008. He was the subject of the 2015 film The Big Short. Since then, though, he's had a mixed reputation for market predictions, having warned about imminent collapses that never came to pass.

For what it's worth, Burry is now betting against Nvidia, accusing the AI industry of hiding behind a bunch of fancy accounting tricks. He's homed in the circular deals between companies.

"True end demand is ridiculously small. Almost all customers are funded by their dealers," Burry wrote on X. He later wrote: "OpenAI is the linchpin here. Can anyone name their auditor?"

As tech companies sink billions into data centers, some executives themselves are freely admitting there looks to be some over exuberance.

OpenAI CEO Sam Altman told reporters in August: "Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes."

And Google chief executive Sundar Pichai told the BBC recently that "there are elements of irrationality" in the AI market right now.

Asked how Google would fare if the bubble burst, Pichai responded: "I think no company is going to be immune, including us."

Copyright 2025 NPR

So many of us have stories about secret shows, celeb sightings and special guests showing up at the intimate Hotel Cafe over the past 26 years. The venue’s Instagram has a bevy of famous well-wishers popping into the chat. So it’s truly the end of an era as the iconic night spot hosts its final shows at the Cahuenga location, wrapping things up with a party called Last Dance at the Hotel Cafe featuring Sara Bareilles and many more on Friday.

But if you can’t score a ticket, fear not, because there’s plenty more music on the agenda for this weekend. Licorice Pizza’s Lyndsey Parker recommends Friday shows St. Lucia at the Fonda; Santigold at the Bellwether; Alejandro Sanz at the Greek; and Desert Daze’s Microdazing at the Bellwether, featuring various DJs, including KCRW’s Travis Holcombe and Beastie Boys producer Mario C. Saturday, Demi Lovato is at the Forum, friend-of-LAist Flea plays the Fonda and the big Japanese music festival Zipangu is at Brookside at the Rose Bowl, featuring Atarashii Gakko!, Ado and many more. And on Sunday, Echo & the Bunnymen are at the Greek, and Father John Misty plays the Fox Theater in Pomona.

Elsewhere on LAist, you can get a behind-the-scenes look at historic Santa Monica music store and venue McCabe’s Guitar Shop, find out what gets left behind at Metro’s Lost & Found and get tickets for next week’s LAist x Moth StorySlam at Los Globos.

Events

Los Angeles Old Time Social

Friday and Saturday, May 15 and 16 
Velaslavasay Panorama 
1122 W. 24th Street, University Park
COST: SUGGESTED $20; MORE INFO

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The 16th annual Los Angeles Old Time Social celebrates the vibrant old-time music scene in Southern California. A kickoff concert on Friday is followed by a full day of activities on Saturday, May 16 at The Velaslavasay Panorama in West Adams. Attend workshops and jams for banjo, fiddle, guitar, singing and dancing. The event is capped off on Saturday night with a big square dance and musical cakes from 7:30 to 10 p.m. No experience or partner is needed. The square dance caller walks everyone through the moves before every song, so it’s easy to follow along in a fun and no-pressure environment.

As LAist's Roy Lenn notes, the Old Time Social serves as a lead-up to the Topanga Banjo Fiddle Contest & Folk Festival on Sunday, May 17 at King Gillette Ranch.

David Lebovitz book signing x Now Serving

Saturday, May 16, 10 a.m.
Friends & Family Bakery
5150 Hollywood Blvd., East Hollywood
COST: FROM $30; MORE INFO

Chocoholics and ice cream fiends will know pastry chef David Lebovitz’s work well. The Paris-based dessert king is in town promoting his cookbooks, The Great Book of Chocolate and Ready for Dessert with a special event at Friends & Family. His ice cream book is the bible for anyone who's tried their hand at making ice cream at home, and his other desserts also stand up to the test. Yum.

The Giving Trees

Saturday, May 16, 3:30 p.m. 
John Rowland Mansion 
15959 E. Gale Ave., City of Industry
COST: FREE; MORE INFO

The John Rowland Mansion is the oldest extant brick building in Southern California, and has a unique history that the House Museum has recently been instrumental in preserving. Spend some time at the Greek revival building with the whole family for The Giving Trees, a reading of children’s books to trees (with gratitude to Shel Silverstein!) in the garden at the permanent installation Let’s Make a Garden From Old Wounds.

Celebrity-Owned Private Collection Arcade and Pinball Auction

Sunday, May 17, 9 a.m. preview
Captain’s Auction Warehouse
4421 E. La Palma Ave., Anaheim
COST: FREE TO PERUSE; MORE INFO

File this one under weird and wonderful. Head down to Anaheim to check out (and maybe bid on) your next game room addition. Ryan Adams — yep, that’s the one, former Mr. Mandy Moore and indie rocker royalty of the early 2000s — is apparently a big arcade collector, and he’s auctioning off much of his collection. There’s a wide range of arcade games and pinball machines on view to the public, plus opportunities to play, meet collectors and see the warehouse.

Red Bull Soapbox Race

Saturday, May 16, 11 a.m.
Gloria Molina Grand Park
200 N. Grand Ave., Downtown L.A.
COST: FREE; MORE INFO 

Daredevils will have a field day at Red Bull’s Soapbox Race, which will transform Grand Park into a cinematic racecourse, where 30 teams, selected from more than 400 applicants, will compete with gravity-powered, homemade crafts for ultimate bragging rights.

Black Association of Documentary Filmmakers: Day of Black Docs

Saturday, May 16, 12 p.m. to 6:30 p.m. 
American Film Institute
2021 North Western Ave., Los Feliz
COST: FROM $23; MORE INFO

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Check out documentaries from Black filmmakers that “explore themes of social justice, self-determination, and community, highlighting the revolutionary leaders and movements that can help inform our present moment.” The day includes three feature-length films and one short film, with two that focus on L.A. history. Q&As will be moderated by journalist and AirTalk film critic Tim Cogshell.

Balboa Island Art Walk

Sunday, May 17, 9 a.m. to 5 p.m.
South Bayfront Promenade
Newport Beach
COST: FREE; MORE INFO

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Is there a more idyllic corner of SoCal than Balboa Island? Stroll the promenade and enjoy the art and the views at the 31st annual Balboa Island Art Walk. There’s live music and more than 90 artists showing their work with an ocean backdrop.

AAPI Market at Yama Sushi Marketplace

Through Saturday, May 30 
Various locations (West L.A., San Gabriel and Koreatown)
COST: VARIES, MORE INFO 

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A rotating lineup of makers featuring Asian-owned brands is popping up at Yama Sushi Marketplace throughout May. This weekend, Omiso founder Ai Fujimoto will be sampling her yuzu miso paired with Yama’s black cod; also available for purchase as a frozen item. On May 30, DoShop Cookies will be available with baker Thy Do sampling her fan-favorite cookies, debuting new flavors and hosting a raffle.

A group of volunteers in Hollywood say they are conducting their own homeless count in the area next week because they don't trust the results of the official regional one.

The effort is organized by Hollywood 4WRD, a coalition of nonprofit service providers, businesses and residents. About 60 volunteers, mostly staff from Hollywood service provider organizations, are expected to fan out across 30 census tracts Tuesday.

Results will be made public a week later May 27, according to organizers.

The neighborhood count comes amid growing questions about the accuracy of the official regional homeless tally.

The city of L.A.'s unhoused population decreased by 5.5% between 2023 and 2025, according to official estimates from the annual count conducted by the Los Angeles Homeless Services Authority, or LAHSA. But a 2025 analysis by the RAND Corporation found that LAHSA undercounted people living outside in certain areas, including Hollywood.

Hollywood 4WRD executive director Brittney Weissman said the organization’s own experience volunteering for the LAHSA count this year raised even more questions about accuracy.

“Our experience was so confounding, perplexing and inefficient that we've been really deeply questioning the value, utility and accuracy of the count for a couple of years now,” Weissman said.

Organizers said the Hollywood count will use methodology developed by RAND researchers, who ran their own professional counts in Hollywood, Skid Row and Venice from 2021 until earlier this year.

That research effort, known as LA LEADS, has since lost funding.

“If LA LEADS was continuously funded into the future, we would not be doing this effort,” Weissman said. "Because it's no longer funded, we felt we needed to take our own initiative to understand the lay of the land here.”

What's at stake?

More than $300 million in federal and county dollars are allocated annually based on homeless count results. That includes $220 million from the U.S. Department of Housing and Urban Development and nearly $100 million from L.A. County's Measure A sales tax.

LAHSA conducted its most recent official homeless count in January. The agency said it hopes to release the results this summer but has not confirmed a release date.

In her reelection campaign, L.A. Mayor Karen Bass takes credit for reducing homelessness in the city. The official count underpinning her claim is the same one RAND found was missing nearly a third of unsheltered people in key neighborhoods.

Weissman said Hollywood service providers need to know now whether more people are living in vehicles or sleeping outside, so they can adjust how they're doing outreach.

Organizers timed the May 27 release to influence budget negotiations still underway at City Hall, according to Weissman.

She noted that Bass' proposed budget does not include funding for Safe Parking LA, a program that allows unhoused Angelenos to live legally in their vehicles within sanctioned parking lots.

"If we find that vehicular homelessness is on the rise here and we need it badly, this gives us evidence with which to petition decisionmakers for that resource in our community," she said.

What RAND found

RAND's LA LEADS project ran bimonthly counts in Hollywood, Skid Row and Venice from 2021 until this January.

Comparing LAHSA’s official counts to its own, a RAND report found the 2025 homeless count captured 68% of the unsheltered population across those three neighborhoods.

RAND found the population of unsheltered people in Hollywood dropped 49% in 2024, a decline it linked to the city’s Inside Safe program. But the official LAHSA count still captured only 81% of what RAND found in the neighborhood.

The people being missed were mostly vehicle dwellers and “rough sleepers” — people living with no shelter, RAND said.

Skid Row's official tally fared worse, capturing 61% of what RAND found there.

Hollywood 4WRD said its methodology follows RAND’s LA LEADS methodology, which the group said is more precise than LAHSA’s approach.

Each census tract will be covered by at least two independent volunteers, a quality-control measure that helps organizers flag areas that might need to be recounted.

Volunteers will also use pens and paper to record their observations, instead of a mobile app. LAHSA has used an app for its count since 2022 and has acknowledged repeated technical problems with it.

The unofficial homeless count this month is limited to Hollywood, unlike LAHSA's countywide effort. Weissman said she hopes the effort will encourage other neighborhoods to check their own local data.

Topline:

Why it matters: In Los Angeles, you can't get more local than a Tommy's Burger. Consuming the smothered burger — its signature beanless chili dripping through the to-go wrapper — is a rite of passage for many. Eight decades in, the original stand is still standing at Beverly and Rampart.

The details: Friday, noon to 8 p.m. only, you can get 80-cent chili cheeseburgers (limit three per person) at all Southern California and Nevada locations. The anniversary celebration at the original downtown L.A. location includes the Belmont High School Marching Band, a DJ and a resolution from Assemblymember Mark Gonzalez , who represents the area, honoring 80 years of business in California.

The backstory: Tommy Koulax opened the original stand at Beverly and Rampart in 1946. This week, the iconic SoCal chain, which spawned many competitors, celebrates 80 years across all 32 of its locations — and you're invited. Daughter Cynthia Koulax will be greeting the community Friday, alongside CEO Dawna Bernal and CFO Richard Hicks.

Every December, the federal government releases a report that reveals the number of homeless residents in each state and across the country.

It’s now May and the report, which compiles data from a homeless census known as the “point-in-time count,” is nowhere to be found.

That’s a problem because the report dictates how funding is allocated in California and beyond. It also shapes policy decisions and provides the country’s main barometer for how the homelessness crisis is being managed.

The five-month delay is leaving public officials, policymakers and advocates scratching their heads. California has filled the gap by tallying its own data, showing a 9% drop in the number of people sleeping outside. But unlike the official federal report, California’s analysis leaves out information such as the race, age and mental health status of the people who are counted. And without the full federal report, there’s no way to tell where California stands compared to other states.

“It’s a big deal,” said Jesse Rabinowitz, spokesperson for the National Homelessness Law Center. “This is, by what I can tell, the latest any point-in-time count has ever come out, including the years where it was delayed during COVID.”

'Point-in-time' count

For the past two decades, the federal Department of Housing and Urban Development has required local regions to take a census of their homeless populations every other year in a massive undertaking called the point-in-time count. Volunteers go out on foot over a day or two in January and count every person they see living outside. People sleeping in shelters are tallied as well. Counters also conduct surveys of a sample of unhoused people, collecting extra data on people’s race, age, gender, time spent homeless, medical and mental health conditions and more.

The count isn’t perfect (volunteers can easily miss people, and different counties use different methods), but it’s a key tool policy makers use to measure changes in the population.

Each jurisdiction (which is known in HUD parlance as a “continuum of care” and typically is made up of a county and the cities within it) must submit their count to HUD by the spring. They also release their local data to the public. Meanwhile, HUD verifies the data, tallies the total count for each state and for the country as a whole, submits a public report to Congress and uploads more detailed data on its website.

While there’s no legal deadline, that report usually comes out in December of the year of the count. In 2021 and 2020, when COVID disrupted counts, the reports came out the following February and March, respectively.

It’s unclear why the 2025 report still isn’t out. The report is so much later than usual that some counties, including San Francisco, already released their 2026 count data.

HUD refused to comment.

“It is perplexing that HUD has not released this information,” Tara Gallegos, a spokesperson for Gov. Gavin Newsom, said in a statement to CalMatters. “Perhaps the Trump administration is afraid to release clear data that demonstrates California’s strategies for addressing this issue are actually extremely effective.”

What California's data show

California’s data does point to a reduction in homelessness, suggesting the state’s methods are starting to work. Data provided by the Newsom administration, and echoed by an independent analysis, show a 4% overall decrease between 2024 and 2025, and a 9% drop in people sleeping in tents, on the sidewalk, in cars or in other places not meant for habitation.

That data comes from the 30 California continuums of care that counted their street homeless populations last year. The remaining 14 that counted this year instead (they’re only required to count at least every other year) are not included.

“I think it shows that the headwinds in California continue to be very strong and continue to push more people into homelessness,” said Alex Visotzky, senior California policy fellow for the National Alliance to End Homelessness, “but the investments to build up the response to homelessness have made a really big difference and are moving people out of homelessness faster than ever before.”

That runs counter to President Donald Trump’s platform, which holds California up as an example of failed homelessness policy. California follows a principle called “housing first,” which prioritizes getting people into housing immediately and then addressing their other needs (such as mental health and substance use help). The Trump administration wants to end housing first, which it says isn’t working, and instead withhold housing until people enroll in addiction treatment or other programs.

California also uses most of its federal funds to pay for permanent housing, which experts say is the most effective way to end someone’s homelessness. The Trump administration recently tried to divert that money to temporary shelters where people stay for a limited time.

California's homelessness strategy

California is one of 19 states suing the Trump administration over that change. That case is ongoing, but, in a win for the states, a federal judge has temporarily blocked the Trump administration’s changes.

A drop in homelessness in California would have a significant impact on the country’s overall homeless population. Nearly a quarter of all unhoused Americans lived in California as of 2024 — a total of more than 187,000 people, according to the most recent HUD report.

The New York Times found homelessness also dropped in other places around the country last year, including Chicago, Denver, Washington, D.C., Minnesota, Florida and Maine, which it found points to a nationwide reduction.

If homelessness dropped nationwide in 2025, it would be the first time in eight years. In 2024, the national count hit 771,480 — an 18% increase from the year before.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.