What If AI Is a Bubble?

"In 2026, global spending on artificial intelligence is supposed to reach close to half a trillion dollars. Nvidia, which makes chips for pretty much all of the big AI companies, recently became the first business to be valued at $5 trillion. In the quest for superintelligence, investors have poured hundreds of billions of dollars into building data centers that will eventually demand more power than many major American cities."

"The investment is based on the promise that AI might one day concoct miracle drugs, program anything, automate everything-inventing out into infinity. But is that day just around the corner? A decade away? And will it ever generate enough profit to make up for this staggering amount of investment? And if not, is the American economy in a new stock-market 1929?"

Global AI spending is projected to approach half a trillion dollars by 2026, and Nvidia reached a $5 trillion valuation. Investors have committed hundreds of billions to data centers that could demand more power than many major American cities. The investments rest on expectations that AI will deliver transformative breakthroughs—miracle drugs, universal programming, and broad automation—generating massive profits. Uncertainty remains about the timing and feasibility of these outcomes and whether returns will justify the scale of investment. Comparisons to 1929, the dot-com bubble, and 2008 highlight systemic risk and raise questions about government responses and impacts on ordinary Americans if expectations collapse.

Read at The Atlantic