AI Bubble Index: what would make it burst

The AI Bubble Index reads 56 out of 100, in the Heated band, as of August 28, 2026 at 6:35 p.m. ET.

Multiple indicators elevated together. The score recalculates four times each weekday. Four of its seven components move with the market; the other three move only when a utility, regulator or company files something new. Every raw value, score and anchor sits below.

Each component's score times its weight. The contributions sum to the composite, so the longest bar is what is actually driving the reading, not just what is elevated. The previous reading was 56, unchanged. Recalculates at 9:35am, 12:35, 3:35 and 6:35pm ET each weekday.

The series began August 20, 2026 and holds 8 daily readings. A ringed point marks a methodology change recorded in the changelog, so a component addition is never mistaken for a market move. Nothing before the first point is reconstructed.

Each row pairs a mechanism that actually did the damage in 2000 with today's equivalent and its current reading. Three are measured. Two are not built yet, and are listed so the gaps are visible rather than quietly omitted.

A supplier standing behind its customer's ability to pay for the supplier's own product. Commitments compared to commitments, because Lucent's widely quoted $8.1 billion was a facility and only $1.5 billion was ever drawn.

Three differences cut in Nvidia's favor. Lucent lent to carriers with no revenue that banks had refused, and booked the resulting purchases as revenue in the same period. Nvidia is guaranteeing a 20-year lease to one of the largest buyers of computing in the world. And Lucent expanded its lending as conditions worsened, where Nvidia cut its commitment by 58 percent because shareholders objected.

NVIDIA quarterly filings; Robert D. Atkinson, Who Lost Lucent, American Affairs (August 2020)

The dot-com collapse never produced an extreme volatility reading. It peaked at 45.08 while the Nasdaq fell 78 percent, a level since exceeded by a credit downgrade, a flash crash and a tariff announcement. Whatever the VIX measures, it is not bubbles.

VIX methodology changed in 2003, so pre-2003 figures are back-calculated from the old VXO, which ran on the S&P 100 and tends to read higher. If anything the true comparable figure for 2002 was lower than 45.08.

The seven screens behind the 65 percent figure, ranked by how much each removes.

Real capacity is being built at very large scale. These two figures are the cleanest evidence of it anywhere in the data, and they belong here rather than in a footnote.

The ones already in the ground. A rule that slows every new entrant does not hurt a project that is already sited, permitted and locally supported. If anything it widens the moat. These are the names with real Pennsylvania exposure that mostly clear the new bar.

The ones that will move anyway. These names have no Pennsylvania exposure we can find. They tend to trade on data center policy headlines regardless of geography, which is a sentiment reaction rather than a change in their business. Worth separating the two before treating a move as information.

There is a live precedent for that split. When New York paused state data center permits on July 14, 2026, TeraWulf finished as the biggest decliner among the AI infrastructure names we track and Nebius was close behind, despite Nebius having nothing to do with New York.

Of all generation and storage capacity that entered a US interconnection queue between 2000 and 2020, 13 percent reached commercial operation. Attrition did not stop at the paperwork either: 41 percent of the capacity that signed an interconnection agreement between 2000 and 2022 had withdrawn by the end of 2025. The median project reaching operation in 2025 took 61 months from its request, up from 36 months in 2015.

This measures generation and storage, not data center load. Lawrence Berkeley National Laboratory states plainly that large loads sit in separate queues its report does not cover. It belongs here as the long-run base rate for how queue capacity turns into working plant, not as a data center figure. Lawrence Berkeley National Laboratory, Queued Up: 2026 Edition (June 2026)

This is deliberately not a count of blocked or cancelled projects. That figure is quoted everywhere and comes almost entirely from one organisation whose clients are the AI industry, with recent project data behind a paywall and approved projects still sitting in its delayed column. Announcement froth is also normal: companies have always announced more than they build, so counting the froth alone tells you nothing.

Two things cut against a bearish reading. Local defeats often do not stick, as when Saline Township, Michigan rejected a $16 billion campus, was sued two days later, settled for about $14 million in community benefits and saw ground broken within two months. And friction runs both ways, since West Virginia has preempted local ordinances that limit large data center projects.

• A thermal drone found 45 unpermitted gas generators running at a Microsoft AI site
• Nvidia cut its OpenAI backstop to $105 billion, and the Lucent parallel
• Four states now publish how much announced data center demand they expect
• Pennsylvania will not permit a data center until the town says yes
• ECB researchers say an AI stock market correction is likely
• AI infrastructure backlog leaderboard

The AI Bubble Index is a weighted composite of 7 components. Each one is scored from 0 to 100 against published anchor points, then weighted and averaged. Every raw reading, weight and anchor on this dashboard is printed here, with the source it came from and the date that reading was taken.

The published series begins August 20, 2026 and now holds 8 daily readings. No earlier reading has been reconstructed and none will be: two of the components rest on grid screens and forward estimates that were never published for earlier periods, so any back-history would be a guess wearing a date. The composite recomputes four times each weekday.

• Commitment gap. Is the demand behind the buildout real? Weight 22 percent, measured as % of announced demand unbacked, updates quarterly.Source: grid operator, utility and regulator interconnection screens · as of August 19, 2026
• Valuation. How much is priced in? Weight 17 percent, measured as median forward P/E of the AI basket, updates daily.Source: Yahoo Finance, AI large-cap basket · as of August 28, 2026Universe (10): NVDA, AMD, AVGO, MSFT, GOOGL, META, AMZN, ORCL, MU, TSM
• Insider selling. Are the people inside selling more than usual? Weight 13 percent, measured as discretionary selling against its own trailing baseline, updates daily.Source: SEC Form 4 filings, rolling 90-day window · as of August 28, 2026Universe (25): NVDA, AMD, AVGO, MU, MSFT, GOOGL, META, AMZN, ORCL, TSM, CRWV, NBIS, IREN, WULF, CIFR, CLSK, CORZ, VRT, GEV, ETN, PWR, POWL, TLN, CEG, PPL
• Counterparty concentration. How few counterparties is this resting on? Weight 13 percent, measured as top customers as % of revenue, and vendor commitments as % of revenue, updates quarterly.Source: NVIDIA 10-Q, quarter ended Apr 26, 2026 · as of April 26, 2026
• Momentum. How far above trend is the price? Weight 13 percent, measured as basket price divided by its 200-day average, updates daily.Source: Yahoo Finance, AI large-cap basket · as of August 28, 2026Universe (10): NVDA, AMD, AVGO, MSFT, GOOGL, META, AMZN, ORCL, MU, TSM
• Complacency. Is any of this priced as a risk? Weight 8 percent, measured as VIX, inverted, updates daily.Source: CBOE VIX via Yahoo Finance · as of August 28, 2026
• Contracted cover. How much disclosed contract coverage supports the valuation? Weight 14 percent, measured as contracted revenue as % of market value, updates quarterly.Source: AIStockWire backlog tracker, audited figures only · as of August 27, 2026Universe (18): AMAT, AMZN, ANET, CAT, CRWV, EME, EQIX, ETN, GEV, GOOGL, IBM, IREN, MSFT, NBIS, ORCL, SNDK, VRT, WYFI

The composite recomputes on the cadence of its fastest inputs, and each component carries its own as-of date so a quarterly reading is never presented as though it were current. No proprietary forecasts are used: every number traces to a public filing, a grid operator docket or a market series, and forward consensus estimates and preliminary grid projections appear only where they are identified as such. There is no login, no paywall and no proprietary input, and because every reading, weight and anchor is printed on this page, anyone can recompute the score by hand and get the same number. Nothing about it is tunable by the reader. The index measures how much today looks like the conditions that ended the last bubble. It does not predict when this one ends, and it is not investment advice.

Two notes on the anchors

• Insider selling was first tried as a raw sell-to-buy ratio and discarded. Open-market buying by insiders at companies this size is close to zero, so the ratio pinned at the top of the scale and could never move. Measuring the basket against its own trailing baseline fixed that. Its baseline covers about a year; windows before that are excluded because the Form 4 pollers were still ramping and record a collection gap rather than an absence of selling.
• Contracted cover is anchored arithmetically rather than historically. No comparable contracted-revenue series was published for the 2000 cycle, so unlike the other six this component is not calibrated against that bust. Inventing a parallel would be worse than saying so.

Does the score survive different assumptions?

The weights are judgment calls, so here is the same data under different ones. Published weights give 56; equal weights give 57; removing any single component and renormalising leaves it between 54 and 61. The reading is a property of the inputs, not of the weighting.

• Without Commitment gap: 54
• Without Contracted cover: 54
• Without Counterparty concentration: 55
• Without Momentum: 56
• Without Insider selling: 58
• Without Valuation: 61
• Without Complacency: 55

Changelog

• August 21, 2026. Counterparty concentration now shows its two readings separately, customer concentration and vendor financing against revenue, each scored through the component's own anchors; the composite still uses their average and did not move. Every market-data component now publishes its exact ticker universe. Contracted cover's question was reworded to say disclosed contract coverage rather than implying the price itself is under contract. Added the contribution breakdown, a history strip and a sensitivity check.
• August 21, 2026. Added Contracted cover as a seventh component at 14 percent, measuring the basket's disclosed GAAP remaining performance obligations against its market value, and rescaled the other six proportionally so their order of importance is unchanged. Every component now publishes its own as-of date and source, and this changelog begins.
• August 20, 2026. First composite published, on six components. The series starts here; no earlier reading has been reconstructed.

For the demand side of the same question, our AI infrastructure backlog and RPO tracker lists what these companies have actually sold under contract, which is the one number a valuation cannot argue with.

Grid, utility and regulator evidence last updated August 19, 2026. A record of what those bodies and companies have published about their own exposure, not a forecast and not investment advice. Most of these bodies file quarterly at best, so this page updates as filings land rather than live.