As Data Centers Proliferate, Will an AI Bubble Lead to a New Recession?

"Over the last few years, artificial intelligence (AI) has become extremely popular in Silicon Valley and is widely regarded as the most transformative technology in the 21st century. In fact, it is already reshaping sectors like education, transportation, finance, health care, media, and telecommunications. Indeed, it is estimated that about 60 percent of jobs in advanced economies may be impacted by AI, which means that it could affect economic growth, employment, and wages."

"As a result, investment in AI is booming across industries, echoing the late-1990s dot-com era, with investors pouring billions into AI in the hope for a big payday. Nearly $1.6 trillion has been put into this technology since 2013, and Big Tech companies are expected to add over $400 billion into AI efforts before the year ends, with even bigger spending planned for 2026."

"Unsurprisingly, there are concerns about an AI bubble, and there are indeed some striking similarities between the AI market today and the dot.com bubble of the 1990s that imploded in 2000, resulting in massive losses for investors and the collapse of major companies, with the U.S. economy eventually entering an economic recession in 2001. If the AI bubble were to burst, not only would virtually every company be affected, but the entire economy could collapse like a house of cards."

Artificial intelligence has rapidly become prominent in Silicon Valley and is widely regarded as the most transformative technology of the 21st century. AI is reshaping education, transportation, finance, health care, media, and telecommunications. About 60 percent of jobs in advanced economies may be impacted by AI, with effects on economic growth, employment, and wages. Investment in AI has reached nearly $1.6 trillion since 2013, and Big Tech plans to add over $400 billion more this year with larger spending in 2026. Concerns exist that the current surge resembles the late-1990s dot-com bubble; a collapse could cause massive investor losses and broad economic turmoil.

Read at Truthout