Interesting Times with Ross Douthat The Next Economic Bubble Is Here
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Oct 23, 2025 
Jason Furman, an economist at Harvard Kennedy School and former advisor to U.S. presidents, dives into the potential bubble surrounding artificial intelligence. He draws fascinating parallels between AI and historical bubbles like the railroads and the internet. Furman discusses the impact of AI on GDP and interest rates, and the psychology driving tech valuations. He raises the question of what might happen if the AI bubble bursts and offers a cautiously optimistic perspective on long-term growth, citing immigration and steady productivity as hopeful signs.
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AI Is Largely A Demand Story So Far
- Jason Furman: AI currently drives demand via data centers and chips but hasn't yet shown outsized productivity gains.
- Productivity impacts matter more long-term than today's demand-driven growth spikes.
Stock Prices Reflect Future AI Profit Expectations
- Much of the stock market rise reflects expectations about future AI-driven profits at the biggest tech firms.
- High valuations require both breakthroughs and a clear path to profit from those breakthroughs.
High Valuations Don’t Guarantee Profits
- Private AI firms like OpenAI have enormous valuations but limited public access to shares.
- Widespread user adoption doesn't guarantee profitable business models or durable moats.