"Chatter about an AI bubble has been everywhere lately, and top tech companies like Google, Meta, and Microsoft have doubled down on their AI investments for 2026. But how have analysts in the past accurately identified forming tech bubbles? Hosts Michael Calore and Lauren Goode sit down with Brian Merchant, WIRED contributor and author of the newsletter Blood in the Machine, to break down the four criteria some researchers have used in the past to understand and brace for the worst."
"Note: This is an automated transcript, which may contain errors. Michael Calore: Hey Lauren, how are you doing? Lauren Goode: I'm OK, Mike. It's earnings season, so a lot of us on the business desk here at WIRED have been tuning into tech companies earnings reports and their earnings calls. And I guess that basically means it's CapEx season. Michael Calore: CapEx? Lauren Goode: Capital expenditures."
A historical four-criteria framework can assess whether AI exhibits the classic signs of an economic bubble. Major tech firms such as Google, Meta, and Microsoft are increasing AI capital expenditures targeting 2026 expansion. Analysts compare current investment behavior, market speculation, valuation dynamics, and deployment timelines against past tech bubbles to identify emerging risks. Recognizing bubble signals allows investors and companies to adjust spending, diversify risk exposure, and plan contingency measures. Preparing for potential downturns can reduce economic harm and inform regulatory and corporate responses to speculative investment cycles.
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