Is AI Repeating the Internet’s 1998 Drawdown? Dan Niles Thinks So

Dan Niles has recommended that investors hold more cash and stay cautious while saying artificial intelligence has not reached a peak and attributing that view to agentic AI, which he says uses 10 to 100 times more tokens than inference. His caution comes days before Microsoft and Alphabet report after the close on October 28 and Amazon reports on October 29. The PHLX Semiconductor Index fell 3.2% last week versus a 0.5% decline for the S&P 500. Niles cites tighter funding and slowing AI-native growth, pointing to CoreWeave’s $1.25 billion unsecured 2032 notes sold in June with a 9.625% coupon and Anthropic’s quarterly revenue growth slowing from 145% to 45%.