In 1849, people didn’t debate whether gold was real.

They debated whether they could get rich from it.

That’s the frame legendary investor Bill Gurley offers when he talks about AI.

And among the many celebrated stewards of Silicon Valley’s fortunes…

Few have framed this era so plainly.

So let’s lay out his thesis, his blueprint, how he plans to play the AI revolution…

And his most important advice everyone—prince to pauper—should ponder.

The Perez Pattern

To start, Gurley is keen on Carlota Perez and her book Technological Revolutions and Financial Capital.

Originally published in 2002, while everyone was still licking their wounds from the dotcom crash, her thesis is simple:

Every genuine technological revolution attracts speculation.

Railroads. Electricity. Automobiles. The internet.

All of it.

When wealth is created quickly, speculators arrive just as quickly.

So asking “Is AI a bubble?” is the wrong frame.

If the wave is real—and it is—speculative behavior is guaranteed.

You don’t get one without the other.

Industrial transformation and froth move together.

Rather than invalidating the revolution, it validates why it’s getting so expensive.

Two Types of Bubbles

Gurley echoes a distinction:

• A financial bubble collapses and leaves wreckage.

• An industrial bubble collapses and leaves infrastructure.

The dot-com era destroyed capital.

It also gave us the fiber, the engineers, the protocols, and the foundation for the next 20 years.

AI looks more like the second category.

Capital is being incinerated at speed. Infrastructure is being built at scale. Both statements can be true.

But here’s where Gurley sharpens the knife.

The Circular Deal Era

When Microsoft invests in OpenAI, and OpenAI agrees to spend heavily on Microsoft’s cloud…

That’s a circular deal.

Money flows in. Then flows back.

On paper it looks like demand. In reality it’s capital supporting capital.

NVIDIA funding customers who then buy NVIDIA hardware? Same pattern.

Gurley says calling it “fraud” is perhaps a step too far. He prefers to call it “not crisp accounting.”

A polite way of saying: froth is present.

When hot streaks happen, risk tolerance rises. Even sophisticated players lean forward.

History shows this clearly.

Then something else happens.