Is the AI bubble about to pop? 

Some financial analysts think so…

AI is worrisome enough already — its insatiable thirst for energy and water, its capacities to replace humans on the job, its potential to destroy the planet over the long run. But my immediate concern is how the flood of money into the opaque AI industry has inflated the U.S. stock market and, indirectly, the U.S. economy. 

What happens if the bubble bursts?

Remember the housing bubble of 2008 that resulted in millions of foreclosures and a recession? What about the dot-com bubble of the late 1990s that wiped out almost 200,000 jobs and trillions of dollars in wealth? Or the stock market bubble that exploded into the Great Depression that lasted for a decade?

These economic bubbles followed a well-worn pattern…

An asset generates excitement among investors because its value starts rising — not because it’s inherently valuable or profitable, but mainly because other investors are buying it. 

As more and more investors borrow piles of cash to get in on the action, the bubble grows. But when it becomes evident that way too much has been invested relative to the potential for profits, the bubble bursts. 

[CLIP: Hey there's a bubble. “How do you know?” Trust me.]

It’s often the case that the biggest investors, with inside information, notice the bubble and cash out before it bursts. Everyone else is left with near worthless pieces of paper. If the entire economy is threatened, governments have to bail out the remaining players to avoid even more widespread destruction.

AI has many of the characteristics of a bubble.

Market valuations of the industry’s major players have soared in recent years. Some of this rise in value is on the basis of legitimate hope that AI will transform the world. But some of the rise is based on industry hype that, ironically, may itself be artificial.

Major AI companies have been pumping up their own value by doing trillions of dollars worth of deals with each other — helping the bubble get bigger by generating more hype and luring in more investment. 

But according to an MIT report, 95 percent of companies that have adopted AI tools aren’t yet seeing any financial returns from them. And some of AI’s biggest companies, like OpenAI, are losing billions of dollars every year. Others, like Oracle, are taking on more and more debt to fund their AI development.

How big can a bubble get? Even Jeff Bezos admits there’s a lot of hot air…

CLIP: “When people get very excited, as they are today, about artificial intelligence, for example ... every experiment gets funded, every company gets funded. The good ideas and the bad ideas. And investors have a hard time in the middle of this excitement, distinguishing between the good ideas and bad ideas.”

Investors sorting out good and bad ideas wouldn’t be as much of a problem if AI weren’t completely taking over the entire U.S. economy. 

Since 2022, shares of stock surrounding AI and its data centers have accounted for an estimated 75 percent of the returns to America’s biggest corporations and 80 percent of earnings growth. The seven biggest technology companies tied to AI are disproportionately propping up the entire U.S. stock market. 

And by one estimate, investments in AI data centers and other infrastructure have accounted for 92 percent of U.S. GDP growth in 2025. All of this growth has of course minted new billionaires and made other Big Tech titans even more wealthy. But what about everyone else?

One way or another, you and I are footing some of the bill surrounding AI development. Thirty-seven states have passed legislation granting hundreds of millions of dollars in tax exemptions for the building of data centers. Electricity bills are rising to power AI. Communities are seeing their water sources depleted. Data centers do create some jobs, but many are temporary — and don’t amount to nearly as many jobs as the ones that could be lost. 

This AI bubble keeps getting pumped bigger and bigger while the rest of the economy, you know the real economy that we actually live in, is gasping for air. Trump’s tariffs are sending prices skyrocketing. Housing and healthcare are out of reach for too many. And the job market is slowing to a halt.  

Which giant corporations or ultra-wealthy investors strike it big — and which lose their shirts — because of an AI bubble is beside the point. 

I worry about the working families whose struggles don’t make the headlines, like AI stocks breaking record after record. 

I worry about the people who are barely scraping by as AI hype masks an economy that is really only working for the super-rich.

I worry about all of the people who could lose their jobs and savings if the AI bubble bursts — possibly causing another massive recession and leading to yet another massive government bailout at taxpayer’s expense.

This isn’t meant to alarm you. But you need to understand the warning signs.

The future of AI is not inevitable — we still have time to shape it.

We can let Big Tech innovate, but we can’t let it dictate the future — or put our entire economy in jeopardy. 

And if the AI bubble bursts, we simply cannot bail out Big Tech and keep inflating its bottom line.