How to spot an AI bubble

Oct 10, 2025

Azeem Azhar, founder of Exponential View, and Scott Clavenna, CEO of Latitude Media, delve into the current state of the AI economy. Azeem unveils his 'boom vs. bubble' gauges, examining critical factors like capital expenditure and strategic valuations. They analyze lessons from past tech bubbles while exploring the implications for energy infrastructure and data centers. The discussion highlights AI's potential in enhancing utility resilience and how societal impacts will depend on policy decisions amidst rapid technological advancement.

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ANECDOTE

ChatGPT Meowed On Azeem's Drive

Azeem Azhar once set ChatGPT to speak only in “cat language” and spent 15 minutes with it meowing back.
He described it as dumb but amusing and impossible to fact-check.

ANECDOTE

Telecom Bubble Taught 'Everyone Lies'

Scott Clavenna recalled becoming hardened after the 90s telecom bubble because "everyone lies to you" during hype cycles.
That experience shaped his skepticism and the signals he now watches for.

INSIGHT

Five Gauges To Tell Boom From Bubble

Azeem built five gauges to judge whether AI investment is a boom or bubble: economic strain, industry-paid funding, customer demand, valuations, and funding quality.
He finds most gauges green or amber, so the picture is mixed and data-driven monitoring is essential.

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The AI economy isn’t coming. It’s already here.

In the first half of 2025, investment in AI infrastructure outpaced all U.S. consumer spending. Tech companies are now building the equivalent of an Apollo program every ten months, while data centers are drawing capital away from nearly every other sector.

As money floods into chips, servers, and substations, the “B word” is suddenly on everyone’s lips: bubble.

This week, Azeem Azhar, founder of Exponential View and one of the sharpest analysts of exponential technologies, joins Open Circuit to unpack the difference between a boom and a bubble. Azeem discusses his recent analysis on bubble dynamics, which established a dashboard for monitoring the health of the AI economy.

Azeem has spent the last decade chronicling how exponential technologies collide with the real world. And lately, that collision has been literal. Data centers are running into grid limits, power supply is the new bottleneck, and trillions in capital expenditures are reshaping capital flows across the economy.

Scott Clavenna, Latitude Media CEO and lead author of the AI-Energy Nexus newsletter, also joins as guest co-host to draw from his experience covering the telecom bubble of the 90s.

So where is this cycle headed? What’s on the other side of it? And what happens when exponential technologies hit the limits of steel, concrete, and electrons?

In this episode, we’ll check the gauges of the AI economy, and ask what it means for the energy economy. Plus, we examine the state of AI, if we’ll ever see energy’s AlphaFold moment, and whether we’re seeing the limits of computing scale.

Open Circuit is brought to you by Natural Power. Natural Power specializes in renewable energy consulting and engineering, supporting wind, solar, and battery storage projects from concept through financing. Discover how we're creating a world powered by renewable energy at naturalpower.com.

With resilience now a leading driver of grid investments, Latitude Media and The Ad Hoc Group are hosting the Power Resilience Forum in Houston, Texas on January 21-23, 2026. Utilities, regulators, innovators, and investors will all be in the room — talking about how to keep the grid running in this new era of heatwaves, wildfires, and storms. Register today here!