Blog: AI Spending and Bubbles
Another characteristic for the Stock Market Bubble Checklist. But it's not new.
A while back I posted my Bubble Checklist, developed during the Tech Bubble of 1999. Recently using the checklist I found that we are indeed in a bubble. But reading lately about the AI arms race among tech companies, I realized that I may have missed one characteristic which is common to technological driven bubbles: Overspending on the new technology. This characteristic makes the current bubble more like the Tech Bubble and the Railroad Bubble (1893) than Tulipomania (1637) or the South Sea Bubble (1720).
Tech companies have reportedly spent more inflation adjusted money in the last two years on AI infrastructure than the US government spent to build the interstate highway system over four decades. And they're still spending. This unfortunately has a familiar ring to it.