Concerns Over AI Bubble and Economy

Is the A.I. bubble about to pop?

Some financial analysts think so.

I think the A.I. bubble is a bubble

and it will pop.

We are absolutely in an A.I. bubble now.

It is going to burst.

A.I. is worrisome enough already.

Its insatiable thirst for energy and water,

its capacities to replace humans on the job,

its potential to destroy the planet over the long run.

But my immediate concern is how the flood of money

into the opaque A.I. industry

has inflated the U.S. stock market and indirectly the U.S. economy.

What happens if the bubble bursts?

Remember the housing bubble of 2008

that resulted in millions of foreclosures and a recession?

What about the dot-com bubble of the late 1990s

that wiped out almost 200,000 jobs and trillions of dollars in wealth?

Or the stock market bubble that exploded into the Great Depression

that lasted for a decade?

These economic bubbles followed a well-worn pattern.

An asset generates excitement among investors because its value starts rising,

not because it's inherently valuable or profitable,

but mainly because other investors are buying it.

As more and more investors borrow piles of cash

to get in on the action, the bubble grows.

But when it becomes evident that way too much has been invested

relative to the potential for profits,

the bubble bursts.

It's often the case that the biggest investors,

with inside information,

notice the bubble and cash out before it bursts.

Everyone else is left with mere worthless pieces of paper.

If the entire economy is threatened,

governments have to bail out the remaining players to

avoid even more widespread destruction.

AI has many of the characteristics of a bubble.

Market valuations of the industry's major players have soared in recent years.

Some of this rise in value is on the basis of

legitimate hope that AI will transform the world.

But some of the rise is based on industry hype that,

ironically, may itself be artificial.

Major AI companies have been pumping up their own value

by doing trillions of dollars worth of deals with each other,

helping the bubble get bigger by generating more hype and

luring in more investment.

But according to an MIT report,

95% of companies that have adopted AI tools

aren't yet seeing any financial returns from them.

And some of AI's biggest companies,

like OpenAI, are losing billions of dollars every year.

Others, like Oracle, are taking on more and more debt

to fund their AI development.

How big can a bubble get?

Even Jeff Bezos admits there's a lot of hot air.

When people get very excited, as they are today about artificial intelligence,

for example, every experiment gets funded.

Every company gets funded.

Investors have a hard time in the middle of this excitement

distinguishing between the good ideas and the bad ideas.

Investors sorting out good and bad ideas

wouldn't be as much of a problem if

AI weren't completely taking over the entire U.S. economy.

The seven biggest technology companies tied to AI

are disproportionately propping up the entire U.S. stock market.

And by one estimate,

investments in AI data centers and other infrastructure

have accounted for 92%

of U.S. GDP growth so far in 2025.

All of this growth has been caused by AI.

of course minted new billionaires and made other tech titans even wealthier.

But what about everybody else?

One way or another,

you and I are footing some of the bills surrounding AI development.

37 states have passed legislation granting hundreds of millions of dollars

in tax exemptions for the building of AI data centers.

Electricity bills are rising to power AI.

Communities are seeing their water sources depleted.

Data centers do create some jobs,

but many are temporary and don't amount to nearly as many jobs

as the ones that could be lost.

This AI bubble keeps getting pumped bigger and bigger,

while the rest of the economy —

you know, the real economy that we actually live in —

is gasping for air.

Trump's tariffs are sending prices skyrocketing,

housing and health care are out of reach for too many,

and the job market is slowing to a halt.

Now which giant corporations or ultra-wealthy individuals and investors strike it big

and which go bust because of an AI bubble is beside the point.

I worry about the working families whose struggles don't make the headlines.

like AI stocks breaking record after record.

I worry about the people who are barely scraping by

as AI hype masks an economy that's really only working for the super

rich.

I worry about all of the people who could lose their jobs

and savings if the AI bubble bursts,

possibly causing another massive recession and

leading to yet another massive government bailout at taxpayers' expense.

This is not meant to alarm you,

but you need to understand the warning signs.

The future of AI is not inevitable.

We still have time to shape it.

We can let big tech innovate,

but we can't let it dictate the future

or put our entire economy in jeopardy.

And if the AI bubble bursts,

we simply cannot bail out big tech and

keep inflating its bottom line.