Let's tour the growing AI economy

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What is the significance of the AI economy in 2025?

Kai Ryssdal 0:02
Okay, so they call it artificial intelligence, but the AI economy is very, very real. From American Public Media, this is Marketplace.
Kai Ryssdal 0:23
In Los Angeles, I'm Kai Risdell. It is Tuesday today, January 27th. Good as always to have you along, everybody. We're going to spend the program today recapping a quick trip I took a couple of weeks ago.
Meghan McCarty Carino 0:35
Morning, everybody. Hey, Kai. How are you? Good morning. Welcome to the Bay Area.
Kai Ryssdal 0:38
Thank you very much. That's Marketplace's Megan McCarty Carino. You hear her here and you hear her on Marketplace Tech. She was my ride at the airport up in San Jose. Tell me why I'm here. Maybe get on a plane at like 8 o'clock this morning.
Meghan McCarty Carino 0:53
You want to talk AI, you want to talk AI and money, you've got to come to the Bay Area.
Kai Ryssdal 0:59
Fair enough. We started our series the other day trying to figure out whether AI is getting too big to fail because there is massive spending happening, massive borrowing, too, to finance the data center boom. I went to one in L.A. Megan talked to people about their not so good feelings about our AI future and the tradeoffs that come with it. But the thing is, the AI future is already happening in Silicon Valley. There's a lot going on here. There's data centers. There's energy. I want to back up for a minute. What does it feel like here, AI-wise? I mean, all the rest of us here about AI is, oh, my God, data centers and power and water and all those things, chat GPT and blah, blah, blah. What does it feel like here in Silicon Valley?
Unknown 1:53
My answer might be a little counterintuitive. I mean, it's definitely like on everyone's, you know, the tip of everyone's tongue. You see it everywhere you go. The billboards are everywhere.
Kai Ryssdal 2:03
We passed a couple of those billboards literally just outside the airport for both biggies like Google Gemini and for smaller companies neither Megan nor I had ever heard of.
Unknown 2:13
In terms of the boom on the ground, I grew up here. I've been through a lot of these cycles.
Kai Ryssdal 2:21
Sorry, so let's back up. You grew up here, which I did not know. I probably should have, but I didn't. So you were here, not that you're necessarily old enough to remember this, you were here in the dot-com box.
Unknown 2:30
Oh, I remember it. I remember it well, yeah. I mean, that was probably the most dramatic time, you know? It was just sort of like overnight. You know, houses in my parents' neighborhood had luxury vehicles in front of them. You know, went from kind of a normal middle-class neighborhood, and then there's just millionaires everywhere. You know, BIPOs are popping off.
Kai Ryssdal 2:49
So is it that yet for AI here?
Unknown 2:51
That's what I would say there's kind of a disconnect. So the local economy here is actually not as thriving as it has been in previous booms. And even just before the pandemic, there are certain metrics that you can look at, like the number of tech jobs in the Bay Area is still lower than it was before the pandemic. You know, we hear about layoffs all the time. The same companies that are spending these billions of dollars on AI are doing layoffs all the time. You know, we just heard about Meta just announced some more layoffs. And so I've heard from a number of people that the job market in tech here hasn't felt this brutal since the dot-com bust. That's really interesting, right?
Kai Ryssdal 3:33
Because during the dot-com bust, it was obviously bad here. I was here as well. And so, you know, I've got some history, but not like you do. But... The dot-com bust being bad makes sense, but we're in the middle of the bubble of AI, man.

How is Silicon Valley shaping the future of AI?

Unknown 3:46
This is the boom time.
Kai Ryssdal 3:48
Right.
Kai Ryssdal 3:55
Where are we going? What are we doing? We should say here, by the way, you're not driving as we're talking. Other people are driving.
Unknown 3:59
No, I would not be able to engage in such complex idea.
Kai Ryssdal 4:03
So where are we going? What are we doing?
Unknown 4:05
Well, we're headed to an AI startup called Tiny Fish AI, which we thought was an appropriate place to check out, you know. Let's go.
Kai Ryssdal 4:18
There are literally thousands of AI startups all over this country. According to PitchBook and the National Venture Capital Association, AI startups got $222 billion in venture capital investment in 2025.

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