Nathaniel (NLW) Whittemore

Today we are talking about the weekend where Silicon Valley seemed to lose faith in AGI, or at least

changed its AGI timeline very dramatically.

And what we're going to discuss today is why even if the AGI timeline that has been all abuzz and the new discussion is correct, it does not mean that AI is a bubble.

And the bubble talk is certainly setting the context for everything happening right now.

You can't throw a stone right now without hitting some article about how the AI infrastructure buildout is a bubble.

CNN Business, for example, just this weekend wrote why this analyst says the AI bubble is 17 times bigger than the dot-com bust.

Some are trying to have a nuanced take that, yes, it's a bubble, but it's a good bubble.

Muhammad Al-Iran calls it a rational bubble.

It's very clear that markets are extremely fearful right now.

The fear and greed index is a simplified way of understanding what emotion is driving the market at any given time.

And we have switched over the last month from greed to deep into the fear category, even heading down towards extreme fear.

Now, part of that, obviously, is the spate of deals between OpenAI and AMD and Oracle and NVIDIA that have people terrified that it's all one big circular web.

And if one domino falls, all the rest will.

Now, I've gotten extensively into arguments for and against the bubble, but the point for this show is that that is setting the tone in the backdrop.

Now, why it is setting the tone in the backdrop is that we increasingly recognize that AI is propping up the entire economy.

Harvard economist Jason Furman shared charts recently with The Simple Analysis.

Investment in information processing equipment and software is 4% of GDP, but it was responsible for 92% of GDP growth in the first half of this year.

GDP excluding these categories grew at 0.1% annual rate in H1.

White House AI's David Sachs writes, GDP growth is currently an outstanding 3.9% and AI is 40% of that.

It's easy for politicians to posture and grandstand by beating up on tech.