Derek Thompson

I mean, how is this going to play out, do you think, in two years?

I want to talk about how some of this might go badly in the next few years.

And I want to preface that discussion by saying that when I talk about AI as a bubble, I think some people see me as being pessimistic about the technology.

The railroads were a bubble.

There was a panic of 1857, of 1873, 1891, I think.

There were constant railroad depressions.

And also the railroads changed the world.

Broadband was a bubble.

It also changed the world, right?

Big infrastructure build-outs that changed the world often pass through a bubble phase.

So it's not particularly pessimistic to say that AI is currently in a bubble.

You could say it's actually incredibly historically in tune to say that we are very likely in the middle of a bubble because every industrial revolution like this passes through bubble phases.

So let's start here.

How close are the hyperscalers?

Meta, Google, Microsoft, the big boys, how close are they to aligning spending and revenue in the AI space?

Or how far, I guess you could say, on the other hand, how far are they from seeing what could be plausibly called AI revenue catching up with AI spending?

I feel like people who remember 2006, 2007 are feeling their eyes start to twitch as you talk about this general law that, I love the way you put it.

It's kind of like, you know your behavior is unethical if you try to keep it a secret.

You know your economic activity is bubblicious if you try to dress it up in financial opacity.

Let's talk about just exactly how this works.