{"id":33289,"date":"2025-11-13T16:04:34","date_gmt":"2025-11-13T16:04:34","guid":{"rendered":"https:\/\/naijaglobalnews.org\/?p=33289"},"modified":"2025-11-13T16:04:34","modified_gmt":"2025-11-13T16:04:34","slug":"what-if-ai-is-a-bubble","status":"publish","type":"post","link":"https:\/\/naijaglobalnews.org\/?p=33289","title":{"rendered":"What If AI Is a Bubble?"},"content":{"rendered":"<p>\n<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><em>Subscribe here: Apple Podcasts | Spotify | YouTube | Overcast | Pocket Casts<\/em><\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">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.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">The investment is based on the promise that AI might one day concoct miracle drugs, program anything, automate everything\u2014inventing 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?<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">In this episode of <em>Radio Atlantic<\/em>, we talk to the <em>Atlantic<\/em> staff writer Charlie Warzel about whether the AI boom is actually a bubble. Does the promise of AI ultimately match the enormous investment? And if not, is the American economy in a new stock-market 1929? A dot-com 2000? A financial-crisis 2008? And if it is, would the Trump White House see the AI giants as too big to fail? What happens to ordinary Americans if the bubble bursts? If it doesn\u2019t\u2014if AI succeeds in paying for itself\u2014does that come at an even greater cost?<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong><em>The following is a transcript of the episode:<\/em><\/strong><\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>[<em>Music<\/em>]<\/strong><\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Hanna Rosin: <\/strong>The amount of money invested in AI these days is astonishing\u2014almost unfathomable. You might even need AI to truly comprehend it.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">Recently, Nvidia, which makes chips for pretty much all of the big AI companies, became the first business ever to be valued at $5 trillion. That\u2019s trillion with a <em>t<\/em>. When I went in to type 5 trillion into my phone calculator just to see what it would look like\u2014\u2019cause, like, that\u2019s what non-trillionaires do for fun\u2014it couldn\u2019t even display the whole number on the screen.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">Nvidia is part of an elite group in the tech industry called the \u201cMagnificent Seven\u201d: seven companies that make up more than a third of the S&amp;P 500. That\u2019s Alphabet, Amazon, Apple, Meta, Microsoft, and Tesla, all of which have made some pretty hefty investments into AI in the last few years.<\/p>\n<p><strong>Charlie Warzel: <\/strong>\u200aHonestly, the amount of money and energy that\u2019s being poured into this is staggering. Global spending is projected to hit $375 billion this year. And in 2026, the figure is supposed to go up to close to a half a trillion dollars.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin: <\/strong>That\u2019s Charlie Warzel, who covers tech at <em>The Atlantic<\/em> and who recently wrote about this topic with our colleague Matteo Wong.<\/p>\n<p><strong>Warzel: <\/strong>\u200aThere\u2019s really no way to put in context, without sounding ridiculous or super vague, just how much money is going into this. We\u2019re talking in historic terms.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin: <\/strong>Back in 2019\u2014a couple of years before OpenAI launched ChatGPT\u2014its CEO, Sam Altman, spoke to a group of industry observers. He was asked how exactly OpenAI plans to make money as a business. And here\u2019s what he said.<\/p>\n<p><strong>Sam Altman (from <em>StrictlyVC<\/em>): <\/strong>The honest answer\u2019s we have no idea. We have never made any revenue. We have no current plans to make revenue. We have no idea how we may one day generate revenue. We have made a soft promise to investors that once we\u2019ve built this sort of generally intelligent system, basically, we will ask it to figure out a way to generate an investment return for you.<\/p>\n<p>(<em>Audience laughs.<\/em>)<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin: <\/strong>In the years since, AI has come a long way. It\u2019s crept into our emails, our term papers. It\u2019s made its way into medical-image analysis, large data sets that companies use to make projections, our late-night musings.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">But one thing it has <em>not<\/em> done is make money on a scale that even remotely matches these mind-boggling investments. So the obvious questions have started coming up more and more: Is this AI boom actually a bubble?<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>[<em>Music<\/em>]<\/strong><\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin: <\/strong>A little over a week ago, an OpenAI investor named Brad Gerstner posed the question on everyone\u2019s mind, about this gap between money going out and coming in.<\/p>\n<p><strong>Brad Gerstner (from <em>BG2<\/em>): <\/strong>How can a company with $13 billion in revenues make $1.4 trillion of spend commitments? And you\u2019ve heard the criticism, Sam.<\/p>\n<p><strong>Sam Altman: <\/strong>First of all, we\u2019re doing well more revenue than that. Second of all, Brad, if you wanna sell your shares, I\u2019ll find you a buyer.<\/p>\n<p><em>(Another guest laughs<\/em>.)<\/p>\n<p><strong>Sam Altman: <\/strong>I just\u2014enough.<\/p>\n<p>I think there\u2019s a lot of people who would love to buy OpenAI shares. I don\u2019t think you wanna sell, right?<\/p>\n<p><strong>Gerstner: <\/strong>Including myself. Including myself.<\/p>\n<p><strong>Altman: <\/strong>\u2014people who talk with a lot of breathless concern about our compute stuff or whatever that would be thrilled to buy shares.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin: <\/strong>Because of the amount of money we\u2019re talking about here\u2014trillions of dollars in the U.S. economy\u2014even some people who would <em>not<\/em> be thrilled to buy shares, who have zero interest in investing in this AI boom, might actually have some skin in the game, whether they want to or not.<\/p>\n<p><strong>Warzel: \u200a<\/strong>These are stocks that are not only a big part of the S&amp;P 500, but they\u2019re also where a lot of retail investors are put in. They\u2019re in a lot of\u2014in basically every index fund.<\/p>\n<p>So there\u2019s this way in which the investment is extremely woven into the American economy. And even if you are not thinking that you are investing in the AI boom, if you are in index funds, if you are just sort of doing the passive investing that a lot of people are doing, you are in this boom in some way.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin:<\/strong> But what happens if it\u2019s true that that boom is a bubble? And what if that bubble is about to burst?<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">I\u2019m Hanna Rosin. This is <em>Radio Atlantic<\/em>. A huge amount of the U.S.\u2019s economic growth is fueled by AI. But it\u2019s probably more accurate to say that it\u2019s fueled by the <em>promise<\/em> of AI: the stories people are telling about how AI can make work and workers more efficient, the promise of superintelligence\u2014all the things that we\u2019ve been seeing in TV and movies for decades.<\/p>\n<p><strong>Warzel: <\/strong>\u200aAlmost everyone is accustomed to some science-fiction image of an ultrasmart computer that is sentient, right? Whether it\u2019s <em>The Terminator<\/em>\u2014<\/p>\n<p><strong>Arnold Schwarzenegger (from <em>The Terminator<\/em>): <\/strong>I\u2019ll be back.<\/p>\n<p><strong>Warzel: <\/strong>\u2014whether it\u2019s Hal from <em>2001<\/em>\u2014<\/p>\n<p><strong>HAL 9000 (from <em>2001: A Space Odyssey<\/em>): <\/strong>I\u2019m sorry, Dave. I\u2019m afraid I can\u2019t do that.<\/p>\n<p><strong>Warzel: \u2014<\/strong>there\u2019s all kinds of preconceptions of this technology.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin: <\/strong>But as we\u2019ll hear from Charlie, so far, none of the grand promises have really come to pass. And the bubble just keeps getting bigger.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Warzel: <\/strong>There\u2019s a recent McKinsey report that\u2019s been sort of passed around in these spheres where people are talking about this that said 80 percent of the companies they surveyed that were using AI discovered that the technology had no real\u2014they said \u201csignificant\u201d\u2014impact on their bottom line, right?<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">So there\u2019s this notion that these tools are not yet, at least as they exist now, as transformative as people are saying\u2014and especially as transformative for productivity and efficiency and the stuff that leads to higher revenues. But there\u2019s also these other reasons.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">The AI boom, in a lot of ways, is a data-center boom. For this technology to grow, for it to get more powerful, for it to serve people better, it needs to have these data centers, which help the large language models process faster, which help them train better. And these data centers are these big warehouses that have to be built, right? There\u2019s tons of square footage. They take a lot of electricity to run.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">But one of the problems is with this is it\u2019s incredibly money-intensive to build these, right? They\u2019re spending <em>tons<\/em> of money to build out these data centers. So there\u2019s this notion that there\u2019s never enough, right? We\u2019re going to need to keep building data centers. We\u2019re going to need to increase the amount of power, right? And so what you have, basically, is this really interesting infrastructure problem, on top of what we\u2019re thinking of as a technological problem.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">And that\u2019s a bit of the reason why people are concerned about the bubble, because it\u2019s not just like we need a bunch of smart people in a room to push the boundaries of this technology, or we need to put a lot of money into software development. This is almost like reverse terraforming the Earth. We need to blanket the Earth in these data centers in order to make this go.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin:<\/strong> Right, it\u2019s real estate. Okay, so there\u2019s this huge amount of investment required, but everybody\u2019s kind of known this calculus for a while, so why are there suddenly headlines about it being a bubble? Why did that worry start to intensify in the last few weeks?<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Warzel:<\/strong> Well, I think a lot of it is seeing the numbers just continue to go up, right? When you start to see things like you have AI expenditures accounting for 92 percent of GDP growth during the first half of 2025, right, that is a pretty wild number.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">But I think, also, you have this real cultural sentiment right now, that a lot of people lived through the dot-com boom and they see something that maybe feels a little bit similar, right? The internet was this paradigm shift of a technological innovation. It was very clear to people that the internet was going to affect commerce; it was going to change a lot of things. And you had all these companies that came out\u2014the famous Pets.com example, right, as sort of the height of the bubble, which was: People can buy pet food online.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">The dynamic of the dot-com crash wasn\u2019t that the internet was a fad; it was that all this investment came in, and all these companies were created, and the ecosystem wasn\u2019t yet developed enough to support it, right? People buy dog food online all the time now. Pets.com was an idea ahead of its time.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">And I think that a lot of people are looking at all this funding, all this money, seeing it kind of rhyme a little bit with the dot-com boom and also thinking, <em>Maybe some of <\/em>these<em> companies are a little ahead of their time<\/em>. Is it going to pay out soon enough? Or is there going to be this idea that, <em>This was kind of a hype cycle. There was this hysteria<\/em>. And that\u2019s where you see this feeling of, <em>Oh, no. We are betting so much. We are putting so many eggs in this basket. What if it doesn\u2019t pay off soon enough?<\/em><\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>[<em>Music<\/em>]<\/strong><\/p>\n<p><strong>Warzel: <\/strong>\u200aThere\u2019s an investor named Harris Kupperman, and he\u2019s very bearish on all of this stuff. And he has said, in order for these companies to break even on what they are spending in 2025 on capital expenditure, they would need to generate $160 billion of revenue. That is to break even on what they\u2019re investing this year in these data centers. The revenues are nowhere near $160 billion in terms of what the generative AI tools are generating.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">He went out with his blog post, and then a bunch of people who are in the industry, who run data centers, who are other investors in this and know the nuts and bolts of it, they told him his estimate was way off and that the revenue that these tech companies would need to generate to break even on this year\u2019s capital expenditure alone is closer to $320 or $480 billion. That is what these companies need to generate this year in order to break even on what they\u2019ve invested.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">We\u2019re dealing with a lot of back-of-the-envelope math on all of this, but that gives you a sense of kind of the dizzying numbers that we\u2019re talking about here.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin:<\/strong> Okay, Charlie, the more you talk, the less this makes sense. So\u2026 (<em>Laughs<\/em>.) So what\u2019s the plan? When Sam Altman, CEO of OpenAI, was asked about this enormous amount of spending, he got somewhat defensive. So do other CEOs or investors outline the plan? What\u2019s the good-news scenario by which this all works out well?<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Warzel:<\/strong> I\u2019m really glad that you said the more that I talk, the less sense it makes, because I just wanna say, that is entirely indicative of my experience reporting on this. I come to this\u2014you know, I don\u2019t have an economics and finance background. I write about technology. I have looked into these things and spoken with people, and I come away sort of with this thousand-yard stare.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">And I think that is a bit of what\u2019s going on here. When people look into this stuff, it\u2019s not that there isn\u2019t maybe some magical save here, right? It\u2019s entirely possible that there are these leaps in this technology, right? The <em>Bloomberg<\/em> columnist Matt Levine has this great line that says, <em>We are going to create God and then ask it for money<\/em>, right? That is what these AI companies are sort of saying. (<em>Laughs<\/em>.)<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin:<\/strong> Or what Sam Altman said, which was, <em>We\u2019ll just build a superintelligence and then ask <\/em>it<em> to solve this math problem for us<\/em>.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Warzel:<\/strong> Right. Yeah, that\u2019s the same thing. And that\u2019s why it\u2019s a little staggering, right? No one is blinking when it comes to the money that\u2019s being invested. The lights are all green here in terms of all of these tech companies. People are plowing ahead.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">This narrative of the AI bubble right now, it definitely exists in media; it definitely exists in the tech analyst space. But Wall Street\u2019s not stopping on this at all. If anything, there\u2019s a FOMO that is happening right now. There is a notion of, <em>We need to get in on this<\/em>, right? This is a race. Not only is it a race from company to company, but it\u2019s also got these geopolitical components to it, right? There is a desire to, on the American end, to want to beat China.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">There\u2019s this feeling like, <em>There is no time like the present. The money is too good right now. We\u2019re not going to stop<\/em>. But when you drill down into it, there\u2019s this notion that, essentially, what\u2019s happening is people are lighting money on fire in the hopes that this thing just continues to turn into the promise that everyone\u2019s hoping.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin: <\/strong>After the break, the case for boom, not bubble: how the AI companies say they actually plan to make money.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>[<em>Break<\/em>]<\/strong><\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin:<\/strong> I find it hard to believe that it\u2019s this level of magical thinking, like, that the real answer people have in their heads is superintelligence. What does that mean, and what does it have to do with making money? Even if they did build a superintelligence, how would that be a return on investment?<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Warzel:<\/strong> It\u2019s a good question. The idea of superintelligence is completely changing the paradigm of what humans are capable of doing, right? It changes the ways that every single hedge fund will be able to do predictive modeling. In terms of scientific discovery, right, if you are a pharmaceutical company, a superintelligence that creates other superintelligences is sort of this exponential amount of research and brainpower that hopefully can come up with a miracle cancer drug that then you can then go out and sell.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin:<\/strong> Okay, so that\u2019s real. That\u2019s real\u2014<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Warzel:<\/strong> There are real ideas here with this. The problem is, right now, we have\u2014you\u2019ve played around with ChatGPT, right? Is that worth rewiring the entire world and global economy around that? I\u2019m not sure, right? And that\u2019s where we get this, I think, real unease and confusion with people.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin:<\/strong> Yeah, it does also feel to me that the difference between this and some of the other speculative-technology moments in history is that everyone sees it, and everyone\u2019s talking about it. That was not true of the housing bubble, for example\u2014it was a fairly elite group of people who could see that one coming. But it feels like a lot of people are talking about this, and no one really has an answer.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Warzel:<\/strong> I think that the best cases for \u201cWe are not in a bubble right now\u201d from the AI industry that I\u2019ve heard\u2014the first is: Everyone says we\u2019re in a bubble, and everyone\u2019s watching it. It\u2019s just what you said, right? There are so many eyes on this thing that how can it get so out of hand, right? This is happening sort of in public, so all the exposure is there. People know what they\u2019re getting into. We\u2019re talking about this all the time. That\u2019s the first one.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin: <\/strong>Interesting.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Warzel: <\/strong>The second one is the notion that there is this physical component, right, this infrastructural component, this data-center component. There\u2019s only so many construction workers and construction companies. There\u2019s only so many chips. There\u2019s only so much land. You can only get these things up and operating quick enough. And that all of that physical infrastructure will moderate some of the investment and some of the spend, right? This notion that we can\u2019t scale up as fast as the companies want, and that will be a moderating influence. It will allow the technology to sort of meet the expectations a little bit better. The gap will dwindle.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">But the concern, though, is there are dynamics at play here that are starting to get a little bit weird and complicated in, like, a 2008-financial-crisis way.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>[<em>Music<\/em>]<\/strong><\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Warzel: <\/strong>There\u2019s a couple complicated dynamics. There\u2019s just the notion of the\u2014if the tech stocks fall, right, there\u2019s a lot of exposure there; there\u2019s a lot of contagion in the sense of: Highly leveraged hedge funds are invested in these companies. They could be forced into fire sales, which could cause this vicious cycle with financial damage in pension funds, mutual funds, insurance companies, everyday investors, right? It\u2019s bad news for anyone who\u2019s trying to play it safe.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">But then there\u2019s this other component that we found in our reporting that, really, it kind of made the hair on the back of my neck stand up a little bit.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">It\u2019s this notion of debt investing. So, essentially, building these data centers is very expensive, and these tech firms don\u2019t necessarily want to take on that debt, right? They don\u2019t wanna ask for loans to build these data centers because it looks bad on their balance sheets, and they\u2019re worried about shareholder returns.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">So to get around this, some of these tech companies are partnering with private equity. And they\u2019re doing this financial engineering, right? The private-equity firms will put up money, or they\u2019ll raise money, to build a data center, and then the company, the tech company, will pay the private-equity firm through the rent that they get renting out the data center.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">So what is happening is you\u2019re having a company repackaging their data-center leases into a financial instrument\u2014basically, a bond that people can sell\u2014and there are examples of this happening. And then they are combining that with others into these securities that are based off of tranches, that are based off of how risky they are in terms of default. And if any of those words sound familiar to anyone listening, it\u2019s because that\u2019s a little bit similar to some of the financial engineering of the 2008 crisis, right, with subprime mortgages.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">It\u2019s not the same thing. Data centers are not subprime mortgages at all. These tech companies are blue-chip companies that make a lot of money. But there is this really interesting financial-engineering situation that is going on that\u2019s starting to just\u2014it\u2019s getting overly complicated, and it\u2019s getting harder to know where some of this money\u2019s going.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">What feels telling to me about this is less the idea of tranches and repackaging, and more this idea that the money is not going in a way that is very easy to track.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin:<\/strong> Right. But I guess, at the same time, like you said earlier, we\u2019re sort of smarter than we were in 2008, so we can see a lot of these dynamics, and maybe that makes some kind of a difference.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">One thing that strikes me as possible is a lose-lose situation, where your one option is: AI is a bubble, and it bursts, and we\u2019re in trouble for the reasons you described. The other possibility is that it succeeds in some spectacular way, and then unemployment skyrockets as a result. What do you think about that dilemma?<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Warzel:<\/strong> I see this a lot. This is the thing that I think about quite a bit, right? It seems to me like you\u2014there aren\u2019t a lot of amazing options at the moment, because the way that I look at this is that the amount of investment is so historic, it is so massive in this technology that the people who are pouring this money into it are expecting something huge, right?<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">Maybe the money\u2019s not rational. Maybe there is this hype. Maybe there is this\u2014it\u2019s just driven by FOMO and all kinds of whatever. But these companies also\u2014they\u2019re not full of idiots, right? They have this notion of what the technology could do sometime down the line. And I think that the only way that these investments make sense is that they are paradigm-shifting for society, in the way that the internet wired us all, connected us all, and sort of weirdened the world. I think that\u2019s what they\u2019re hoping that artificial intelligence does, and we can already see that it has had a disruptive impact, even in its more rudimentary form.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">So it does frighten me to imagine, <em>What is enough to satisfy that investment?<\/em> I think it would be a massive amount of job loss\u2014or just of reorganization and kind of chaos.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin:<\/strong> Mm-hmm. It sounds like you\u2019re saying it\u2019s chaos either way, like there\u2019s a bubble that brings pain, like the kind of pain we had in the financial crisis, or a true breakthrough that brings disruption and possibly mass unemployment.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Warzel:<\/strong> Yes. I think that, absolutely, we are in a position where, if these companies create the thing that is worthy of this much investment, it is going to cause an extreme amount of societal rewiring and probably financial pain. And if they don\u2019t manage to pull it off, I think it\u2019s going to cause an extreme amount of financial pain.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin:<\/strong> So pretty much bad either way. But I guess there\u2019s a scenario where we could just live inside the bubble, or this fear of the bubble, for the next 10 years, but it never actually crashes?<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Warzel:<\/strong> There is a really interesting, I guess, debate or controversy\u2014however you wanna say it\u2014around the notion of, <em>Will these companies be put in a too-big-to-fail bucket?<\/em> Right?<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">There was an executive at OpenAI who mentioned in an interview something about the United States government \u201cbackstopping\u201d the company, right, if there was a bubble. And they had to walk that back. There was this big controversy. They said, <em>No, no, we don\u2019t\u2014we\u2019re not expecting a bailout for no reason. We want the free market to do its thing<\/em>, etc., etc.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">But there is this really interesting thought experiment here, right, with this amount of investment, and that\u2019s why I mentioned earlier that there\u2019s these geopolitical stakes. Donald Trump, to the extent that he knows anything about artificial intelligence, knows that he doesn\u2019t want China to have anything resembling a superintelligence before the United States, right?<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin: <\/strong>Mm-hmm.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Warzel: <\/strong>There have been these data-center partnerships through the White House, right, that have been facilitated by that. Donald Trump, one of the first things he did was bring Sam Altman to the White House and announced this Stargate investment partnership, right, with OpenAI.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">So there is this potential notion of, <em>Maybe these investments can\u2019t be made allowed to fail<\/em>. Maybe it is seen as this geopolitical imperative, that it becomes very clear that the government\u2019s not going to allow these companies to fail\u2014or change the parameters of it or underwrite some of the losses in some way.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">And I think <em>that<\/em> is going to be a very interesting thing, if it ever did come to pass, because these companies have acted like they are building the second coming. And if, all of a sudden, they ended up in a situation where they had to get a bailout, I think there would be an intense cultural backlash to that.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>[<em>Music<\/em>]<\/strong><\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\"><strong>Rosin: <\/strong>Thanks again to Charlie Warzel. Starting Friday, November 14, you can listen to Charlie host his own show. It\u2019s a weekly video podcast called <em>Galaxy Brain<\/em>, where Charlie is gonna talk to people who know a lot about our hectic information ecosystem. And Charlie is gonna try and give us back our sanity.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">This episode of <em>Radio Atlantic<\/em> was produced by Jinae West. It was edited by Kevin Townsend. Rob Smierciak engineered and provided original music. Genevieve Finn fact-checked. Claudine Ebeid is the executive producer of <em>Atlantic<\/em> audio, and Andrea Valdez is our managing editor.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">Listeners, if you enjoy the show, you can support our work and the work of all <em>Atlantic<\/em> journalists when you subscribe to <em>The Atlantic<\/em> at TheAtlantic.com\/listener.<\/p>\n<p class=\"ArticleParagraph_root__4mszW\" data-flatplan-paragraph=\"true\">I\u2019m Hanna Rosin. Thanks for listening.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Subscribe here: Apple Podcasts | Spotify | YouTube | Overcast | Pocket Casts 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<\/p>\n","protected":false},"author":1,"featured_media":33290,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55],"tags":[904],"class_list":{"0":"post-33289","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-social-issues","8":"tag-bubble"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/33289","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=33289"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/33289\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/33290"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=33289"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=33289"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=33289"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}