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                           Benefits of the AI Bubble

   Adam Engst

   At Stratechery, [1]Ben Thompson writes:

     What goes up must come down, which is to say bubbles that inflate
     eventually pop, with the end result being a recession and lots of
     bankrupt companies. And, not to spoil the story, that will almost
     certainly happen to the AI bubble as well. What is important to keep
     in mind, however, is that that is not the end of the story, at least
     in the best case. Bubbles have real benefits.

   We are, of course, in an AI bubble, and billions of dollars of
   investment will evaporate when the bubble bursts. However, as Ben
   Thompson points out, bubbles aren't inherently bad. They drive
   overexuberant investment into both infrastructure and innovations that
   are left over to power the next wave of technology. The dot-com bubble
   gave us the fiber that became the backbone of today's Internet, and it
   brought hundreds of millions of people online, creating a market for
   consumer Internet firms and a population capable of working on the Web.
   In the case of AI, although the money spent on short-lived Nvidia GPUs
   may be wasted, the investment in chip fabs and power generation will be
   the foundation of an increasingly digital and electrified society.

   [2]Read original article

References

   1. https://stratechery.com/2025/the-benefits-of-bubbles/
   2. https://stratechery.com/2025/the-benefits-of-bubbles/

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