David Einhorn’s Greenlight Fund: “We Can’t Make Sense of the AI Math”
Just how massive can AI spending get? Meta Platforms’ latest move — a record-breaking $27 billion private-credit deal to fund a new Louisiana data center — might have pushed even Wall Street’s limits.
But it’s not just everyday investors who are struggling to make sense of the numbers. In our Call of the Day, billionaire David Einhorn and his $2 billion hedge fund Greenlight Capital say they’re “refusing to join the AI frenzy,” calling the current enthusiasm mathematically unsound.
Einhorn, who correctly called Lehman Brothers’ downfall before the 2008 crash, said a month ago that AI-related spending is “so extreme that it’s really, really hard to understand.”
In its latest quarterly letter, Greenlight doubled down:
“When it comes to AI, doing the math is essential. The numbers simply have to make sense — and right now, they don’t.”
The firm cited McKinsey’s projection of $6.7 trillion in global data center investment by 2030 — a figure it believes will require “extraordinary leverage” to finance. By Greenlight’s calculation, the industry would need to generate $2 trillion in annual revenue by 2030 just to earn a reasonable return.
“Something’s got to give,” the letter warns, likening today’s hype to the dot-com bubble, when nobody knew “who would be the last buyer or the last short seller.”
It’s been a tough road for Greenlight this year — the fund reported a 3.6% loss in Q3, bringing its 2025 gains to just 0.4%, compared to the S&P 500’s 14.8% rise. Still, Einhorn says there are no regrets:
“While others are doing better right now, many are taking risks that we find hard to justify.”
Instead of chasing AI, Greenlight is leaning into biotech and utilities. The fund highlighted Coya Therapeutics (COYA) — where it’s the largest shareholder — as a potential standout, citing optimism around the company’s clinical trials for an ALS (Lou Gehrig’s disease) treatment.
“When AI startups with little more than a PowerPoint are getting multi-billion valuations, we’d rather invest in Coya — a $100 million company with real potential.”
Greenlight also disclosed a medium-sized stake in Pacific Gas & Electric (PCG), expecting state-backed recovery after devastating wildfires. Its gold exposure through Green Brick Partners (GRBK) helped cushion the quarter’s losses, though gains were partly offset by a housing hedge.
The fund closed out its Teck Resources (TECK) position with a solid profit but criticized the miner’s coal spinoff and merger with Anglo American (AAL).
Einhorn’s bottom line:
“This is still the most expensive market we’ve ever seen. Our best move is to stay cautious and disciplined.”
John Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis.
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