(BNS) Could AI Spending Blow Up The Economy? With Paul Kedrosky

Tech Brew Ride Home

Amalgamated Internets, LLC

News, Technology, Daily News, Tech News

4.7 • 984 Ratings

🗓️ 9 August 2025

⏱️ 39 minutes

🔗️ Recording | iTunes | RSS

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Summary

I spoke with the great Paul Kedrosky to discuss the significant impact of AI capital expenditure (CapEx) on the economy, exploring how it contributes to GDP growth and the implications of this spending. Qw delve into the rapid growth of AI-related investments, the short lifespan of data centers, and the potential risks associated with this economic phenomenon. 00:00 The Impact of AI Capital Expenditure on the Economy 09:34 The Dynamics of Data Center Investments 19:39 Debt Financing and Its Implications 30:09 Potential Risks and Future Outlook for AI Investments Articles mentioned on this episode: Paul Kedrosky: Honey AI Capex Ate The Economy Chris Mims in the WSJ Noah Smith Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome to another bonus episode, a weekend episode, but the first episode of the newly
0:12.1	rechristened Tech Brew Ride Home.
0:15.2	So this is the first Tech Brew Ride Home bonus episode.
0:18.5	I'm Brian McCullough.
0:19.3	As always, we have somebody that should have been on
0:23.3	the show many times for years. I don't know how we haven't spoken before, but we're going to talk to
0:29.9	Paul Kedrusky. I've started reading him at Infectious Greed, a blog that he ran for years. You've seen it
0:36.3	on CNBC. He's a Seed Stage investor blog that he ran for years. You've seen it on CNBC.
0:39.6	He's a Seed Stage investor.
0:42.7	Paul, thanks for coming on the show.
0:43.9	Yeah, sure.
0:44.9	Thanks for the invite, Brian.
0:47.5	So you lit a fire.
0:53.0	You wrote a piece that got a thousand other people to write pieces.
1:00.1	I'm going to link to it in the show notes, but basically, the title was,
1:02.6	Honey, AI, CapEx is eating the economy.
1:07.3	And let me start with the data point that is in your piece that first caught my attention,
1:16.4	which is that essentially AI CAPX spending by big tech platforms, but just, you know, data center spending in general, might be contributing half a percentage point
1:22.0	to GDP growth or more. I can't remember if that was Neil Dutta's number or your number. But basically,
1:30.9	as Chris Mims pointed out in his piece, Cap-Ex spending for AI might have contributed more
1:39.2	to growth in the U.S. economy in the past two quarters than all of consumer spending.
1:44.6	Oh, yeah. So, all right, these are insane numbers.S. economy in the past two quarters than all of consumer spending? Yeah.
	...

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