The US stock market’s recent surge, fueled by massive investments in AI, has raised concerns of a potential bubble akin to the dot-com collapse. Key players like Nvidia, which is investing up to $100 billion in OpenAI, are central to this trend. Nvidia’s strategy ensures that its GPUs remain integral to AI development, causing fears of “circular financing” similar to that seen in past market bubbles.
Despite OpenAI’s projected revenue growth to $20 billion, substantial losses persist, highlighting precarious financial foundations. Experts suggest that the need for $500 billion annually in AI capital investments may fall short by $800 billion in revenues, amplifying apprehensions of an unsustainable market.
With tech giants dominating the S&P 500’s growth, concentrated wealth may portend a significant financial crisis, mirroring past market failures. This trend underscores the disconnect between stock market gains and real economic growth, raising alarms about the future of AI investments.
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