What Would Happen If an AI Bubble Burst? (news.slashdot.org)

AI spending has become a major engine of U.S. growth: the Bureau of Economic Analysis figures cited by the Washington Post show the economy expanded 1.6% in H1 largely because of AI investment, and Big Tech — Google, Meta, Microsoft and Amazon — are on track to spend nearly $400 billion this year on data centers and related infrastructure. That rush is already reshaping local economies (more demand for electricity, trucking and commercial real estate) and driving massive cloud, chip and datacenter buildouts even as popular products like ChatGPT and Claude attract hundreds of millions of users and broad enterprise adoption. The concern is that this is a speculative bubble: independent analysts estimate AI investment is many times larger than prior tech bubbles (MacroStrategy’s note puts it at ~17× the dot‑com bubble), Bloomberg warns of rising debt to fund capex, and critics point out that few new AI initiatives are yet reliably profitable. Financial firms (Goldman Sachs) warn an inevitable slowdown in data‑center construction would ripple to chip suppliers, utilities and service providers and could cut a large share of expected S&P revenue growth. For the AI/ML community the takeaway is twofold: technical progress and user traction are strong, but durable economic impact depends on scalable, profitable deployment models and more efficient infrastructure to avoid systemic market shocks.