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Is There an A.I. Bubble? And What if It Pops?

November 20, 2025
  • Silicon Valley continues massive investment in AI despite Wall Street concerns about a potential bubble.
  • AI spending is driven by the belief in transformative technology and the pursuit of artificial general intelligence (AGI).
  • OpenAI plans to spend $500 billion on U.S. data centers alone, with global AI infrastructure investment nearing $3 trillion.
  • The AI boom echoes the dot-com bubble, with infrastructure investments possibly at risk if the technology fails to deliver as expected.
  • Significant debt is being taken on to finance AI data centers, raising concerns about systemic financial risks.
  • Much of the AI-related debt is opaque, involving private credit institutions and asset-backed securities, complicating risk assessment.
  • Industry leaders acknowledge the hype and risks but emphasize the potential long-term payoff despite possible losers.
  • The uncertain timeline for achieving AGI may offer society time to address ethical and economic challenges posed by AI advancements.
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