How long can the AI boom continue at this pace? (www.latimes.com)

The Bank of England and the IMF this week warned that surging AI optimism has inflated tech valuations to levels “comparable to the peak” of the 2000 dot‑com bubble, raising the risk of a sharp market correction. Tech stocks now make up about 40% of the S&P 500, and privately held OpenAI is valued near $500 billion despite no profits; major capital commitments and partnerships (Nvidia, AMD, a reported $300 billion Oracle data‑center deal) are driving investor fervor. Regulators flagged stretched equity valuations and downside risks—from shortages of electricity, data or chips to shifts in infrastructure needs—that could expose global markets if AI expectations cool. For the AI/ML community this matters because a market correction would reshape funding, hiring and infrastructure investment cycles even as the technology’s long‑term promise remains uncertain. Technical bottlenecks (chips, data centers, power) and the high cost of training and serving large models mean firms must demonstrate real ROI for “AI agents” beyond chatbots; analysts note a wide range of productivity outcomes, from modest gains (MIT’s Daron Acemoglu: ~0.7% U.S. productivity over a decade) to transformative scenarios. Industry leaders (Bezos, Altman, Jensen Huang) argue short‑term froth won’t erase long‑term value, but investors and buyers are already scrutinizing use cases and unit economics more closely—shaping which research directions and products get funded next.