[22300] in Privacy_Forum
[ PRIVACY Forum ] Script of my national radio report yesterday on
daemon@ATHENA.MIT.EDU (Lauren Weinstein)
Tue Oct 14 10:31:25 2025
Date: Tue, 14 Oct 2025 07:22:10 -0700
From: Lauren Weinstein <lauren@vortex.com>
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This is the script from my national radio report yesterday discussing
how the bursting of the AI Bubble could wreck the broader economy. As
usual there may have been minor wording variations from this script as
I presented this report live on air.
- - -
Yeah, so we've talked many times about the dangers and risks in AI
systems. And this has especially related to Large Language Model
generative AI like chatbots and summarization systems, search
overviews and related apps, and all the errors and misinformation that
these systems are unfortunately most famous for, and that make using
them for anything important quite a perhaps unwise leap of faith.
And we've talked about some of the positive uses of AI too, especially
the ones that aren't based on these notorious Large Language Models.
And we've explored various aspects of the problems surrounding these
massive and very expensive data centers being built around the country
to support these AI systems, with local residents increasingly
fighting back against them because of their disruption of rural areas,
their heavy electricity and often water use, sometimes air pollution
and noise from generators, and so on.
But there's another aspect of AI that even some of the Big Tech
Billionaire CEOs running these firms are starting to talk about. And
that's the potential economic impact if the AI "bubble" collapses as
more and more economists are predicting, perhaps happening soon. Some
suspect it may have already begun!
And here's something to ponder. Reportedly about 80% of U.S. stock
market gains this year are tied to AI-related companies. Their
spending on AI just in the U.S. is enormous -- I've seen reports that
suggest it's approaching half a trillion dollars spending on data
centers just this year. Maybe more. Globally it could be three times
that. That could be many trillions by 2030, IF the AI bubble doesn't
burst by then.
It doesn't take much economic expertise to realize what kind of
revenue is going to be required by these firms to avoid their smashing
into a brick wall when the bills for their AI expansions come due. But
there really continue to be no obvious signs that consumers and
businesses are finding these AI systems to be sufficiently useful to
justify the kinds of expenditures that would lead to such revenue
growth. And partly due to the string of AI-related tragedies -- like
AI chatbots being apparently involved in both suicide and murder
cases -- various governments are finally starting to impose much needed
restrictions on these AI systems -- though I would argue that these
don't go far enough yet to provide real protections.
But irrespective of all this, Big Tech just keeps spending that money
because they're stuck in a "we can't be beat by the other guys"
mindset, even if it leads to financial disaster for the firms --
looking for all the world like those rats streaming off a pier into
the water in an old TV movie version of the Pied Piper of Hamlin.
But much more is actually at stake. Recall that 80% number I mentioned
earlier about stock market gains. The bursting of the AI bubble could
devastate the stock market and everybody who either directly or
INDIRECTLY has a stake in it. And that's a LOT of individuals,
families, investment funds, government agencies, other companies,
other organizations, and more.
And this gets even worse. Because the equipment being installed in
these data centers becomes rapidly obsolete, the speed with which
equipment needs to be replaced may be much more rapid than anticipated
even a couple of years ago. So the financial pressures on the Big Tech
firms building those data centers could be even more extreme, with
everything that this implies.
Given the important non-AI services that these various Big Tech firms
have traditionally provided, if they're damaged by an AI bubble
bursting their AI dreams into scattered tatters, it's probably bad
news for those other services and everyone depending on them. But it's
many orders of magnitude worse when you consider that they could drag
down the broader economy nationally, maybe globally as well. Of
course, the billionaire CEOs will still manage nicely. The rest of us,
as usual, will likely get the shaft. Stay tuned.
- - -
L
- - -
--Lauren--
Lauren Weinstein
lauren@vortex.com (https://www.vortex.com/lauren)
Lauren's Blog: https://lauren.vortex.com
Mastodon: https://mastodon.laurenweinstein.org/@lauren
Signal: By request on need to know basis
Founder: Network Neutrality Squad: https://www.nnsquad.org
PRIVACY Forum: https://www.vortex.com/privacy-info
Co-Founder: People For Internet Responsibility
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