CoreWeave will be the moment AI resets.

Blain’s Morning Porridge – October 16th, 2026“Markets are not smart or intelligent, but they are very efficient at converging on the wrong conclusions.”It’s been a bad week in the AI markets. Suddenly folk are waking up to the growing gap between inflated expectations and disappointing revenues, and the risks which include competition. It’s a pattern that reoccurs repeatedly in markets. The name to watch will be CoreWeave – illustrating what can go wrong when blithe assumptions about fantabulous upside ignore the rules of financial commonsense. A default or troubling rescue is on the cards. Key TakeawaysAI is a key technology of the future, but the path to riches seldom runs smooth. The AI Investment Bubble is running well ahead of commercial adoption as businesses figure out how best to harness its power effectively and economically.CoreWeave is the potential catalyst for an AI reset. It is the canary-in-the-coal mine showing how revenue growth is failing to cover rising debt costs.Strong demand for AI Services in a competitive and price-inelastic market (remember the Chinese do AI too!), does not guarantee success when capex, opex and debt costs are rising – Accounting 101.Nvidia’s infamous circularity financing of chip sales to datacentres could magnify losses. Nvidia is down nearkly $300 bln this week! It highlights the risks of being an investor in what you supply – making it a leverage play on GPU demand (which is a function of price and competition)!A collapse in Chips could trigger a reset across the private capital markets based on the number of deals secured on chips, compute and infrastructure, now on the books of captive insurance firms. Continued/ go to www.morningporridge.com for access to the full story.If you subscribe to the full Morning Porridge you get the email every morning and links to videos and podcasts…