"As the Washington Post observed in newreporting on the AI bubble, speculative investment into AI development is now the dominant force driving the US economy. By the numbers, the US GDP has grown at a rate of 1.6 percent so far this year, on pace to hit the 2.8 percent growth it achieved in 2024. That's all well and good on paper, except for the troubling fact that two-thirds of that growth came from AI, per WaPo 's analysis."
"The short answer: the largest tech firms could likely weather the storm, while AI startups and private companies reliant on venture capital to the pay the bills would crumble into dust. Energy and construction markets would likewise suffer, as new data center development grinds to a halt. The effect on Wall Street - which could see the S&P 500 lose as much as 30 percent of its expected revenue growth, WaPo notes - would be devastating."
Speculative investment in AI has become the dominant force behind recent US GDP growth, with roughly two-thirds of current growth attributed to AI. Computer and software investments account for about 6 percent of the economy while consumer spending—typically responsible for roughly 70 percent of GDP—has been eclipsed by the AI boom. If AI spending stops or slows, large tech firms could survive but AI startups and venture-backed private companies would collapse. Energy and construction activity tied to data center builds would decline. Public-market concentration in tech could transmit volatility to retirement accounts and materially reduce expected S&P 500 revenue growth.
Read at Futurism
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