After AI (newleftreview.org)

The valuation of AI-related firms has seen a dramatic tenfold increase over the past decade, with most of the world’s largest companies linked to artificial intelligence, primarily concentrated in the U.S. This surge in market value is largely fueled by anticipated breakthroughs in AI that promise enhanced productivity and the potential for post-human intelligence. However, the financial ecosystem underpinning this boom is increasingly reliant on debt financing, leading to concerns about the sustainability of this rapid growth. For instance, companies like OpenAI are spending significantly more than they earn to maintain their operations, while Meta is entering intricate financial deals for extensive data center investments, hedging against potential failures in the anticipated AI transformation. The implications of this trend are multifaceted. While initial productivity gains in sectors like writing and customer service are observed, broader adoption and tangible economic benefits have not materialized as swiftly as expected. The heavy reliance on sophisticated chips and data centers brings risks of obsolescence and financial strain, raising fears of potential disruptions if profitability falters. This could result in a constriction of AI resources and infrastructure, echoing past market bubbles. Furthermore, the environmental impact of escalating data center demands adds an ecological dimension to the challenges facing the AI landscape, suggesting that reliance on AI may lead to unsustainable practices and geopolitical tensions as companies pursue crucial resources.