Speculative bubbles often leave behind valuable infrastructure while bankrupting the investors who financed them. AI could follow the same path, but the industry’s growing reliance on borrowed money raises the risk of a major financial crisis long before its world-beating applications emerge.
CAMBRIDGE—About a year ago, the idea that speculative investment has created an “AI bubble” began to take hold and soon became conventional wisdom. Since bubbles always burst, the fear now is that time is running out for this one.
