The Global AI Bust
AI-generated overview
This article posits that the rapid adoption and revenue growth of AI are creating a massive financial bubble comparable to historical technological revolutions. While AI is genuinely transformative, the author argues that market valuations have exceeded fundamental support, driven by the 'Four O's' of overvaluation, overownership, overinvestment, and overleverage. The global economy is heavily dependent on AI growth, with the US, China, and Asian semiconductor hubs leading the stack. The author predicts that the bubble will eventually burst, causing significant economic shock, wiping out weaker players, and leading to a more consolidated and stable AI ecosystem.
What’s discussed
- Roughly 30 percent of Americans are using AI less than four years after ChatGPT's release.
- AI company revenue is three times what previous digital technologies generated in their early years.
- The top ten S&P 500 stocks are all big AI players, accounting for nearly 40 percent of the index.
- Net exports of AI-related goods account for a third of China's economic growth.
- South Korea's market value exploded from $1.5 trillion in early 2025 to over $5 trillion by summer 2025.
- Kioxia's share price spiked to more than 45 times its value from a year earlier.
- Amazon, Google, Meta, and Microsoft accounted for half of all clean energy deals signed globally in 2025.
- Private spending on data center construction is up by roughly 50 percent year-over-year.
- Spending on all other building projects in the United States is down by five percent.
- U.S. tech stocks crossed the tenfold inflation-adjusted price rise threshold in 2025.
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