This episode is brought to you by Sarmaya Partners. Learn more about Sarmaya’s LENS ETF, their full data and comparison, including performance here: https://sarmayaetf.com/
Ben Inker, Co-Head of Asset Allocation at GMO, joins Other People’s Money to discuss why the IPOs and subsequent shareholder unlocks of SpaceX, Anthropic, and OpenAI will bring an unprecedented amount of equity issuance and pop the AI bobble. Inker explains how this mechanism was responsible for popping tech bubbles in 2000 and 2021 and the mathematical relationship between below average equity returns and equity supply. He also outlines how this equity supply in conjunction with a slowdown in the AI buildout from realizations of an AI overbuild could send the stock market down as much as 50% with even greater pain for the most AI linked companies.
Read GMO’s Q3 2026 Quarterly Letter: https://www.gmo.com/globalassets/articles/quarterly-letter/2026/gmo-quarterly-letter_3q-2026.pdf
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Timestamps:
00:00 Intro
01:10 AI Bubble Setup
06:12 Equity Supply Matters More
10:44 IPO Wave Math
15:32 Sarmaya LENS ETF
16:59 Dotcom Fiber Parallel
20:32 Finding Non-AI Bets
24:06 Passive Flows and Liquidity
29:40 Credit Risks and Spillovers
37:51 Can Government Backstop AI?
41:48 Credit Stress Check
45:36 Energy Portfolio Benefits
48:13 Value Versus Growth Spreads
50:10 Ex-US AI Winners
54:34 Big Tech Commoditizes Compute
57:00 What If Mega Caps Go Sideways?
01:01:53 Memory: Cyclical Peak Earnings Trap
01:05:09 The Major Crash Scenario
01:10:44 Conclusion
