Quoth the Raven
· QTR’s Fringe Finance
· July 25, 2026 at 12:15
· ⏱ 15 min read
| Read on Substack ↗
Summary
Harris Kupperman argues that the AI capex bubble will end in significant capital impairment, drawing parallels to historical malinvestments like railroads and fiber. He believes the unwind could trigger a recession deeper than the dot-com bust, with the government eventually stepping in. His fund is positioning for this by focusing on second-order beneficiaries (e.g., technical colleges for reskilling) and maintaining a feudalist economic framework.
•AI buildout represents 2–3% of US GDP before multiplier, with a wealth effect supporting over 10% of US GDP.
•Fiber buildout during the internet bubble was ~1% of US GDP; its unwind led to S&P -49% and NASDAQ -78%.
•Kupperman compares AI to canals, railroads, and fiber: great for users, terrible for shareholders funding the buildout.
•He missed the AI boom by fading it, but now aims to be 'Rockefeller' (second-order users) rather than 'Carnegie' (suppliers).
•He purchased shares of the two largest US technical colleges, betting on reskilling as AI displaces workers.
•His event-driven book gave back Q1 gains and was cut off for the summer; it is roughly flat for the year.
•He maintains that the global economy operates under 'Feudalism' where oligarchs recycle dollars into US assets, harming Main Street.
•He personally concentrated nearly all of his net worth into the fund after receiving a large distribution from Mongolia Growth Group (MGG) in mid-2026.