Merryn Talks Money Dambisa Moyo on Why the AI Bubble Still Has Room to Grow
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Dec 1, 2025 Dambisa Moyo, a prominent global economist and member of the UK's House of Lords, shares her insights on the current AI market dynamics and the UK's economic challenges. She believes the AI sector shows bubble characteristics but is still in its early stages. Moyo discusses the concentration of gains in tech stocks and the risks posed by shadow banking. She highlights the impact of high energy costs on UK growth and emphasizes the need for a more compelling national story to attract investment. Additionally, her views on Bitcoin reveal skepticism towards its valuation.
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AI Shows Bubble Traits But May Be Early
- AI market shows classic bubble signs: elevated P/E ratios and concentrated gains in a few stocks.
- Dambisa Moyo argues it's early innings because institutional investors haven't fully jumped in yet.
AI CapEx Fuels Valuations And Risk
- Huge AI CapEx plans (c.$500bn p.a.) justify some valuations by funding productive assets like data centers.
- Moyo warns these are big, levered bets that could amplify systemic risk if sentiment shifts.
Retail-Led Rally Lowers Immediate Spillover Risk
- Retail investors currently dominate the AI-driven rally which limits systemic risk for now.
- Moyo says true bubble danger rises when institutional investors heavily allocate to the theme.