Are we in an AI bubble?

As I speak, hundreds of billions of dollars are being poured into artificial intelligence.

Many say it's the investment the technology deserves,

the push towards an abundance of intelligence that could change humanity forever.

Others are calling it a bubble, a repeating economic story of excess,

untethered belief and ultimately collapse.

In the 1600s, a bubble led to tulips trading for more than houses.

For the price of one bulb. And in the 1800s, bubbles led to tulips trading for more than houses. For the price of one bulb.

And in the 1800s, bubbles led to thousands of miles of unused railway tracks being built.

All of these ended in disaster with money down the drain, investors losing their shirts and shocks to the economy.

The narratives seduce us, but ultimately that rhetoric turns into reality

and prices collapse. To some extent, the current AI wave resembles past manias, and so there's a

key uncertainty. Is this sustainable growth, or are we leading to a bubble? It's complex, because

bubbles look a lot like booms while you're in them.

A boom also involves rapid investment and optimism.

But eventually fundamentals like cash flows and productivity catch up.

So I spent hundreds of hours figuring this out.

I dug through data, I talked to investors and economists, I made a number of models. I compared what's happening

today to the bubbles of history. So all of this led me to a five-gauge framework that helps

us understand AI bubble risk in much the way that a pilot uses a number of different gauges

to figure out if the plane is flying

safely. These gauges can give us a sense of the path we're on right now and help us understand

...