The Ante Establishment
While you’re worrying about what happens if AI takes all the jobs and dominates humanity, here’s another possibility to consider. What happens if it doesn’t? Or what happens if it does, but the rise to dominance (or at least profitability) takes longer than expected? We’ve pushed all our computer chips onto the table. Economically, we’re all in. In fact, unlike a poker game where being all in means betting all the money you have left, we did that, and then kept borrowing more and more chips. It’s arguable that we’ve never been this pot committed on any economic bet in history. What if it all goes to pot? Annie Lowrey in The Atlantic (Gift Article): The AI Bubble Is No Ordinary Bubble. “The American stock market is booming, thanks to artificial intelligence. Tech giants are borrowing billions to acquire AI talent, purchase chips and hardware, and construct data centers. And market watchers are starting to get worried. They see financiers bulldozing giant piles of money to private AI start-ups with no realistic path to profitability, tech companies reliant on other tech companies for revenue growth, and non-tech businesses without a lot to show for their AI investments. The value of AI-linked firms has climbed $27 trillion in the past three years—an astonishing amount, equivalent to 36 percent of the value of the entire U.S. stock market today. Although future earnings could justify those valuations, as Dominic Wilson and Vickie Chang of Goldman Sachs argued in a note to clients, the profit expectations require Panglossian optimism.” (That term, referring to excessive optimism, comes from Dr. Pangloss, a character in Voltaire’s Candide, who repeatedly suggests, “all is for the best in the best of all possible worlds.” If Voltaire knew that one day I could get that summary from AI instead of having to read the book, he may have never created the character. And I’m guessing if Dr. Pangloss were brought to life in 2026, he’d last through about 30 seconds of a Trump press conference before scratching his head and saying, “Whoa, actually, things look pretty grim.)
+ Because of the money, land, power, water, and technology required, coupled with the spending power of those who have enjoyed market gains, the AI boom/bubble is touching nearly every part of our economy, from the stock market to Main Street. NYT (Gift Article): Stocks and the Economy Are Increasingly Relying on the A.I. Boom. The “spending and investment have helped carry the U.S. economy through a tumultuous period of inflation, tariffs and geopolitical uncertainty. But it also creates a vulnerability: If investor confidence in A.I. falters, the economic activity built atop it could come crashing down. Bank of America’s monthly global fund-manager survey for July reported a bursting of the A.I. bubble as the key risk to financial markets. It’s also now the key risk to the economy.”
+ White House to Redirect Billions in Research Funds Toward AI, Away From Colleges.
+ Meanwhile, OpenAI Says Its A.I. Models Went Rogue and Attacked a Digital Library. (Phew, I was worried it might have attacked my portfolio…)
