Some of the wealthiest business people in the world are chopping it up about something that defies orthodoxy: the AI bubble, they hope, will soon collapse.
Gone are the days of debating whether AI is an economic bubble. Having already fallen $800 billion short of turning a profit on the AI boom, some of the tech industry’s biggest players have accepted that the financial arithmetic on AI just doesn’t add up. But here’s the catch: though the AI bubble objectively makes life harder for the rest of us, to the silicon valley elite, the economic consequences of its downfall could actually be a good thing.
New reporting by the Atlantic details the heterodox sentiment sweeping through the tech industry. The pro-Bubble stance has its roots in a 2024 book called “Boom: Bubbles and the End of Stagnation,” by tech investors Tobias Huber and Byrne Hobart. These fellas argued that there are essentially two kinds of economic bubble: the good ones, like the Dot Com bubble, and the bad ones, like the 2008 subprime lending crisis.
Though both do significant economic damage when they burst, Huber and Hobart argue that bursting the good bubbles nonetheless helps accelerate technological progress in capitalist economies. With bubbles, Hobart told the Atlantic, a “set of investments that you could never underwrite otherwise suddenly makes sense.”
That attitude has helped tech executives and their investors rationalize away one of the most irrational concentrations of finance capital the US has seen in decades. “Stop trying to make bubbles go away,” as the venture capitalist James Thomason wrote last year. “Yes, bubbles create volatility. Yes, investors lose money. Yes, employees lose jobs when companies fail. But the alternative is underinvestment in transformative opportunities.”
Some of the biggest names in tech have signaled support. Last October, Amazon founder and CEO Jeff Bezos explained that bubbles “can even be good, because when the dust settles and you see who are the winners, societies benefits from those inventions.” OpenAI CEO Sam Altman has likewise argued that AI will a “huge net win for the economy” no matter what, even if a “phenomenal amount of money” ends up in the blender.
Of course, if the whole thing does come tumbling down, it‘s not the tech billionaires who will suffer. Some will go bankrupt, sure, but that just means less competition for market dominance. Each sees themselves as too big to fail — so when the bubble does burst, you can expect plenty of drama.
“You should expect OpenAI to spend trillions of dollars on data center construction in the not very distant future,” Altman added. “You should expect a bunch of economists to wring their hands.”
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