AI Bubble Already Burst Where It Mattered

The feared AI bubble may have already deflated at its speculative edges. While names like SoundHound AI have collapsed 66% from peak, hyperscalers are committing hundreds of billions in capex drawn from genuine operating cash flow, not venture dollars or SPAC proceeds. Nvidia posted $34.9 billion in free cash flow in a single quarter. Palantir hit a Rule of 40 score of 127% yet trades down 21% year-to-date. Unlike dot-com, where everything rose together, this market is actively sorting winners from losers, suggesting a real infrastructure buildout rather than pure speculation.