The Global Story Is the AI boom actually a bubble?
Dec 30, 2025
Evan Davis, a seasoned BBC economics presenter, dives into the heated debate around the AI investment boom. He draws parallels to the dot-com bubble, emphasizing how excitement can lead to frothy speculation. Davis discusses the high stakes of speculative investments and highlights risks like circular financing among AI firms. He warns of potential economic fallout if these bubbles burst, yet acknowledges that consumers might enjoy enhanced services. Ultimately, he urges patience in witnessing AI's true impact.
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Episode notes
Dog Ends The Motorbike Habit
- Evan Davis recounts giving up motorbikes because the family dog couldn't ride with them.
- The decision shows how small personal choices reshape other activities over time.
Bubbles As Part Of Innovation
- Bubbles are a feature of capitalism that follow big discoveries, not a bug to be avoided entirely.
- Investment booms reveal which technologies are valuable by testing many bets and letting winners emerge.
Big Spending Can Still Be A Rational Bet
- Massive capital spending can coexist with low current revenues and still be a rational bet.
- The true test is whether those investments produce products customers will pay for over time.