This Is How the AI Bubble Will Pop - Derek Thompson
The artificial intelligence boom is the most important economic story in the world. But the numbers just don't add up.
Note
Curator's note
Derek Thompson argues AI is vital yet bubbly: $400B annual infrastructure spend rivals Apollo, but consumer revenue only $12B. Like railroads/broadband, expect crash before transformation. Momentum drives stocks, hyperscalers use tricks/SPVs to inflate profits. Data centers warp economy, divert capital from manufacturing. Energy NIMBYism pushes offshoring. Prediction: black hole sucks resources until ROI materializes or bubble pops.
Highlights
Some people think artificial intelligence will be the most important technology of the 21st century. Others insist that it is an obvious economic bubble. I believe both sides are right.
Every financial bubble has moments where, looking back, one thinks: How did any sentient person miss the signs? Today’s omens abound.
Thinking Machines, an AI startup helmed by former Open AI executive Mira Murati, just raised the largest seed round in history: $2 billion in funding at a $10 billion valuation. The company has not released a product and has refused to tell investors what they’re even trying to build.
derekthompson.org Created: October 7, 2025 Updated: March 6, 2026 article