Overview

• Tech giants are expected to spend about $364 billion on AI this year, with data-center investment projected to reach $5.2 trillion by 2030, according to McKinsey.
• New analysis highlights the growing use of Enron-like special-purpose vehicles that keep debt off corporate balance sheets and transfer exposure to investors such as REITs.
• Warnings flagged by the Bank of England and the International Monetary Fund describe concentrated valuations and the risk of a sharp market correction tied to AI bets.
• Empirical studies to date show limited broad productivity gains, including a 1.1% increase in aggregate worker productivity from the St. Louis Fed and a 0.66% decade-long TFP boost estimated by Daron Acemoglu.
• Commentators including Paul Krugman, Paul Kedrosky, and Jim Chanos compare today’s surge to earlier manias and caution that a pullback in AI capex could reverberate through markets and the economy.