Just like the dotcom fiasco….
IMF Warns That AI Bubble Could Take Down the Entire World Economy
Prepare for the gravy train to go off the rails.
https://futurism.com/future-society/imf-ai-bubble-world-economy
Fears of an AI bubble have been growing for years. And now the International Monetary Fund is the latest to sound the alarm. In its Global Financial Stability Reportpublished last week, the global financial institution warned that markets everywhere are increasingly at the mercy of precarious AI investments.
The untold billions poured into AI has driven economic growth, the IMF says, but the boom could quickly invert if profits, which so far have largely proven elusive, never come to fruition — or at least not proportionately with the epic investment levels. AI stocks would tank, and the resulting market correction would send powerful shocks across the global economy.
“Growing leverage could be a catalyst for such a correction,” the IMF warned ina blog postabout its findings. “Hyperscalers, as the largest data center operators are known, are borrowing more and more, while investors have been leveraging to invest in AI stocks.”
The report also casts a wary eye to thecircular nature of AI financing, in which the biggest benefactors and beneficiaries of AI companies are other AI companies. Nvidia, for example,agreedto invest $30 billion in OpenAI and provide another $105 billion towards an OpenAI data center; OpenAI is one of Nvidia’s biggest customers, relying on its chips to power and train its AI models, so a lot of those billions will go straight back to Nvidia when its buys more chips. Besides creating a mirage of robustness, it also means that their financial health is inextricably tangled with each other.
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Mainecat ·
