Azeem Azhar

That's all for now, and I'll catch you next time.

Are we in an AI bubble?

As I speak, hundreds of billions of dollars are being poured into artificial intelligence.

Many say it's the investment the technology deserves, the push towards an abundance of intelligence that could change humanity forever.

Others are calling it a bubble, a repeating economic story of excess, untethered belief and ultimately collapse.

All of these ended in disaster with money down the drain, investors losing their shirts and shocks to the economy.

The narratives seduce us, but ultimately that rhetoric turns into reality and prices collapse.

To some extent, the current AI wave resembles past manias.

And so there's a key uncertainty.

Is this sustainable growth or are we leading to a bubble?

It's complex because bubbles look a lot like booms while you're in them.

A boom also involves rapid investment and optimism.

But eventually fundamentals like cash flows and productivity catch up.

So I spent hundreds of hours figuring this out.

I dug through data.

I talked to investors and economists.

I made a number of models.

I compared what's happening today to the bubbles of history.

So all of this led me to a five-gauge framework that helps us understand AI bubble risk in much the way that a pilot uses a number of different gauges to figure out if the plane is flying safely.

These gauges can give us a sense of the path we're on right now and help us understand what we need to look out for in the future.