Crash and Learn?

I keep writing about the AI tech boom (and potential bust) for a few reasons. One, like many other people, my stock portfolio has long been filled with tech heavy stocks (which makes me feel like a genius). Two, it’s a boom that is powering a remarkable portion of the American economy. And three, a lot about it worries me. “America appears to be, at the moment, in a sort of benevolent hostage situation. AI-related spending now contributes more to the nation’s GDP growth than all consumer spending combined, and by another calculation, those AI expenditures accounted for 92 percent of GDP growth during the first half of 2025. Since the launch of ChatGPT, in late 2022, the tech industry has gone from making up 22 percent of the value in the S&P 500 to roughly one-third.” Matteo Wong and Charlie Warzel in The Atlantic (Gift Article): Here’s How the AI Crash Happens. “Listen to the AI crowd talk enough, and you’ll get a sense that we may be on the cusp of an infrastructure boom. And yet, something strange is happening to the economy. Even as tech stocks have skyrocketed since 2022, the companies’ share of net profits from S&P 500 companies has hardly budged. Job openings have fallen despite a roaring stock market, 22 states are in or near a recession, and despite data centers propping up the construction industry, U.S. manufacturing is in decline. It’s clear that AI is both drowning out and obscuring other stories about the wobbling American economy. That’s a concern. But even worse: What if AI’s promise for American business proves to be a mirage? What happens then?” (For one thing, I’ll feel like less like a genius and more like a crash test dummy.)

+ WaPo: One force is propping up the economy. Now it’s getting stronger.

+ NYT: How OpenAI Uses Complex and Circular Deals to Fuel Its Multibillion-Dollar Rise.

+ I covered these deals in more detail last week: The Circular File.