Will AI end up causing a global crisis? The loss of value in many big tech companies could harm the Western economy

Last year on these same pages, we wondered whether the artificial intelligence sector was a bubble or not, referencing analyses from newspapers like the Financial Times or the Wall Street Journal, which expressed concerns about the difficulty for some companies in the field to recover large initial investments. About eighteen months later, the number of institutions and reputable publications especially active in the financial sector that view the enthusiasm surrounding the rise of artificial intelligence systems with growing skepticism has increased.

Recently, even the Bank of England and the International Monetary Fund have expressed concerns and reservations on the topic. According to more and more observers, the risk is that the enormous weight of the artificial intelligence sector in the Western and especially U.S. economy is based on high-risk investments. Big tech companies have allocated significant resources to developing artificial intelligence systems, including building vast data centers required to power them, yet the technology itself is still not capable of generating profits sufficient to cover the high production costs. In this context, if enthusiasm for AI were to fade, the value of many companies could sharply decline, dragging down part of the Western economy and generating, in a cascade effect, significant global repercussions.

Why the Artificial Intelligence "Bubble" Is Being Discussed

Those who criticize the financial sustainability of the artificial intelligence sector compare it to the so-called "dot-com bubble" of the late 1990s, when the first web-related companies reached very high valuations, only to collapse, triggering a phase of recession. Another frequent reference is the subprime mortgage crisis of 2008, when high-risk loans granted to individuals with low creditworthiness and then packaged into financial securities ended up generating an international economic crisis.

According to some analysts, moreover, the potential artificial intelligence bubble could be even larger than the dot-com and subprime mortgage bubbles. Even Sam Altman and Jeff Bezos, while continuing to acknowledge the enormous potential of artificial intelligence, have not hidden the risks associated with the sector, noting that investor enthusiasm often seems excessive. In particular, what worries many economists most are the massive investments allocated to building new data centers. OpenAI, for instance, has presented a $500 billion plan to build next-generation processing facilities, while Meta has announced its intention to invest hundreds of billions of dollars in the same area. Although on a smaller scale, numerous other companies worldwide are following the same direction.

Underlying these economic efforts are two main beliefs: the first is that the user demand for artificial intelligence systems will continue to grow; the second is that the progressive improvement of this technology could generate economic growth sufficient to justify the ongoing investments. Some studies, however, suggest that the potential contribution of companies active in artificial intelligence to the U.S. GDP, the country leading this potential technological revolution, will not be proportional to the resources invested. In the U.S., in fact, the AI sector is currently responsible for about 40% of GDP growth: a very high share that, if reduced, could have significant consequences for the entire Western economy.