I feel like I’ve been at least somewhat of a cheerleader for the AI boom, so let’s talk a little bit about the case for an AI bubble. The Guardian talks about it mostly in stock valuation terms, with a little discussion of corporate debt.

In focus at the moment is the concentration of equity in just seven companies, the Magnificent Seven: Amazon, Alphabet (Google), Nvidia, Meta (Facebook), Microsoft, Apple and Tesla (possibly soon to merge with Elon Musk’s other venture, Space X)…

It is disturbing that the 10 largest companies in the S&P 500 account for about 40% of the index’s total market capitalisation, which is well above the 27% peak reached during the tech bubble of 1999-2000…

Yet the AI bubble has further to run because the top 10 are making huge profits, they have a US president who is prepared to lose wars to keep the financial markets happy, and the world is awash with savings looking for a home.

In my mind, we need to see an acceleration in real GDP growth and productivity growth to go along with this stock market surge, and then we might be able to hope for a soft landing. If I were much smarter I would make some kind of dashboard to look at all this data side by side. There must be smart people doing this, no?