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

It may be entering a new era, but walking into the Original Pantry Cafe still feels like stepping back in time. The caged cash register is still there, with a worn spot on the floor in front of it, and the wood-board menus listing the day’s specials in chalk.

The iconic diner, which had served downtown L.A. from the corner of Ninth and Figueroa streets for over 100 years, closed in March 2025 amid a labor dispute, after the trust that owned it decided to sell the property. Now, under new ownership, it reopens Thursday, Nov. 19.

Leo Pustilnikov, a developer, bought the building in September 2025, and Hope the Mission, a San Fernando Valley nonprofit, will now run it, with all profits going to shelters for L.A.’s unhoused community.

Longtime staff are returning under a new contract with UNITE HERE Local 11. Rowan Vansleve, president of Hope the Mission, called bringing them back “incredibly emotional.”

What’s back and what’s not

Fans of the Pantry will find familiar names on the menu, including the famous coleslaw and sourdough toast from Frisco Baking Co. And of course, the beloved pancakes make their triumphant return, now made from scratch.

“We’ve got the same sourdough that we were using prior to Hope the Mission coming in,” Vansleve said.

The Pantry’s dining room and long counter keep their classic diner look, with a new bakery case near the front windows.

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Other dishes got a 2026 makeover. The Denver omelet now uses poblano peppers, the fried chicken sandwich comes with a spicy chile glaze and pickled radish, and a new bakery case is stocked with cookies, pies, chocolate malt crunch cake and peach cobbler.

“There are a few alterations on the menu,” Vansleve said. “Tastes have changed, and this needs to be successful.”

Two new sandwiches are named after donors who helped fund the reopening. The Betty Burger comes with Cooper sharp cheese, grilled onions, house pickles and Pantry Gold sauce on a sesame bun. Grant’s Sky High Deli piles half a pound of warm corned beef with Gruyère, horseradish slaw and mustard on toasted rye.

“I’m really excited for people to try our burger,” said executive chef Daniel Hur.

A stack of buttermilk pancakes made from scratch costs $16.

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Buttermilk pancakes are $16, and the classic breakfast platter — eggs, meat, Pantry potatoes and toast — is $21.

“We did a lot of research to make sure that we’re just under pretty much everyone else in the local area,” Vansleve said. “We’re not gonna gouge you.”

The Pantry no longer runs around the clock, and it now takes cards.

But Vansleve hopes the shortened hours will be temporary. “The Pantry’s not truly back until it’s 24 hours,” he acknowledged, adding that hours will expand as demand allows. He also hopes to reopen Riordan’s Tavern, the adjoining bar, “in some renewed format sometime late next year.”

Not everyone is sold

As soon as the new menu was posted online, commenters flooded the restaurant’s Instagram page and Reddit, pleading for nothing to change.

Hur, who grew up in Culver City, said he understands. “I love Tito’s Tacos. It’s been around since the ’50s. If someone came in there and changed the Tito’s Taco, I’d be like, ‘Why?’” he said. “So I get it.”

The specials board greets Angelenos ahead of the Nov. 19 reopening.

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Hur said he’s had to weigh purists against diners looking for something new, aiming to welcome back regulars while drawing in a new crowd. He’s open to feedback. “I know even if I’m not open to it, I’m gonna get it,” he said. “So I might as well be open to it.”

Vansleve’s pitch is simpler: “Give it a go, come in.”

Every meal helps, he said. “100% of the profits is gonna go back to the charity.” Hope the Mission runs 35 shelters housing about 3,500 people on any given night, according to Vansleve

To reach its 24-hour goal, he said, “We need to see those lines around the corner like they used to be.”

One of Broadway’s most popular shows in years, Oh, Mary! is now at the Ahmanson Theatre through Dec. 6. It stars drag performer extraordinaire Alaska Thunderf*ck 5000, known mononymously as Alaska.

Alaska caught up with LAist host Julia Paskin to talk about taking the Tony Award-winning dark comedy on the road, how competing on RuPaul's Drag Race has changed over the years, and where to see a great drag show in Los Angeles.

A role she was made for

The list of actors who have played the titular role of Mary ranges from seasoned comedians, like show creator Cole Escola, to Jane Krakowski and Bowen Yang, the latter of whom is currently on an extended Broadway run.

Jane Krakowski during her broadway run in "Oh, Mary!"

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“It's going on my tombstone,” Alaska said. “Like, it's the biggest deal ever.”

The role not only has big proverbial shoes to fill, but also requires donning a large, heavy hoopskirt for a costume. That was not a problem.

“If you ever just wanna, like, change your entire personality, just put on a hoopskirt,” she said. “It really changes the way you move and the way you kinda act and the way you stand. That's drag, I guess, because drag is sort of transforming based on what you're putting on your body, and it really does change everything.”

The higher cost to compete on Drag Race 

Speaking of drag, Alaska initially rose to fame appearing on Season 5 of RuPaul’s Drag Race in 2013 and the second season of the All Stars spinoff in 2016, which she won. Longtime fans of the reality show can confirm a lot has changed over the years with the competition becoming more expensive and queens investing in pricey, commissioned costume pieces and drag accessories.

Alaska said she’s grateful she competed when she did.

“I got in under the wire,” Alaska said. “I got onto that show back when you could show up with a bag of dirty laundry and you could do pretty well. When I went on that show the first time, I was borrowing stuff from other girls. I really just went to the thrift store and got some stuff. I had my friends make some stuff with me as well.”

She says the pressure is also more intense with the audience expecting a high production quality.

“The viewership is so knowledgeable about fabrics, and designers, and fashion, and polish and wig lines,” Alaska added. “That's good. I mean, I think that it's a pendulum, and it swings back and forth. Yes, we love to see exquisite, fabulous costumery on Drag Race. But, we also like to see some, stupid, silly drag as well.”

Where to catch great drag in LA 

Alaska recommends Meatball’s Phat Slut show at Precinct in downtown L.A., and added "anything happening at Precinct is going to be unique, fierce, fun, and just like an excellent vibe.”

Another top recommendation is “The Golden Girls Live” from drag queens Jackie Beat and Sherry Vine.

“It happens in a very small room,” Alaska said. “So you're literally sitting onstage with the Golden Girls. There's really nothing like it.”

You can see Alaska in Oh, Mary! at the Ahmanson Theatre and when her Revolution Tour stops in at Pacific Electric May 8, 2027.

Rhea Borja and her husband, Eric Wee, bought their home in Altadena in 2022. After the January 2025 Eaton Fire, it still stood, in a pocket of other homes that also survived.

At first, that was a relief. As many fire survivors have found, though, remediating smoke damage has been nearly as daunting as rebuilding a home that burned.

That has been true for Borja and Wee too. They’ve been living in Northern California since the fire, while they work to get their home cleared of the toxic remnants of the smoke.

The Eaton Fire destroyed 9,414 structures, including homes and businesses. For the thousands of structures were left standing, Gov. Gavin Newsom signed laws in September setting new rules for smoke damage cleanup.

What has that looked like in practice? Three Eaton Fire survivors spoke with LAist recently about the challenges they’ve faced.

Remediation challenges

Rhea Borja stands in her driveway just a month or so before the January 2025 fire. All of the houses behind her across the street burned down, including all the trees and greenery.

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On the blocks around Borja’s home, the frames of homes being rebuilt are taking shape. But her home has stood empty for 22 months.

“It has been an enormous test of patience,” she said.

Her home has gone through four remediations. The lead test results after the most recent remediation cleared EPA standards. Since then, Borja has had a new HVAC system installed.

Next up, re-insulating the attic.

She’s hoping to be back in Altadena early next year but recognizes there’s still a lot to do, including remediating the front and back yards. She’ll have to pay for those projects out of pocket.

“I miss Altadena. I miss Los Angeles. I miss being by the San Gabriel Mountains,” Borja said. “So I just feel kind of removed from the area, and sometimes it almost just seems like a dream.”

A hallway in Rhea Borja’s home after it was remediated for a third time in June 2026.

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Rhea Borja removed the remediator’s tape and plastic covering over a living room window of her Altadena home in mid October.

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Simon Perry and his partner have two properties in Altadena that still require remediation.

One is their home right outside of the fire zone, and the other is a rental property right in the middle of it.

At Perry’s home of 15 years, the contamination was off the charts.

“To give you an indication of how badly contaminated it is, the attic crawl space tested at 3,391 units of lead,” Perry said. “So there's 50 times the safe level of lead in the crawl space of the attic.”

Perry had intended to retire the week of the Eaton Fire. He postponed that while he dealt with the fire’s aftermath — spending hours itemizing personal items, then throwing them away.

By the end of September, he and his partner moved for the fourth time since the fire.

Before that move, their temporary home was “full of cardboard boxes and boxes full of stuff, you know, because everything is in transition and has been in transition for 20 months,” he said.

A return home

After 19 months of being displaced, Susan Mohini Kane, husband Bernard Kane and their cat returned to Altadena.

Being displaced was unsettling, but Kane said she learned a lot.

Susan Mohini Kane shared this photo with LAist from March 2026 after most of her home’s contents were removed. The walls were cut up for rewiring.

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Susan Mohini Kane and her husband Bernard Kane began moving in over the summer. A friend gifted her hand-sewn quilt to replace one they lost to smoke damage.

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“More things happened every day that I didn't expect,” Kane said. “They ended up, basically, having to tear our house down.”

The walls of the Kane home were removed and then replaced. They filled and hauled bags of fire-damaged goods out of their home.

Now that she’s back, Kane is excited to return to her work as a voice teacher, singer and songwriter.

Susan Mohini Kane and her husband Bernard Kane are happy to be back in their home after 19 months of remediation and repairs after the Eaton Fire.

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She wants people who didn’t experience the wildfire to know what people are still going through nearly two years later.

“We're still here. We're still suffering. We're still needing so much help,” she said.