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Will the AI Bubble Trigger a Financial Crisis?
3 Articles
3 Articles
From the halls of Wall Street to the television studios of the financial establishment, a word resounds with contained force: crisis. It is not pronounced with the 2008 drama or the desperation of 1929, but with the caution of those who know that stillness is barely apparent. "We will have a collapse, but I cannot tell you when or how deep it will be," warned Andrew Ross Sorkin, one of the most influential analysts of American economic journalis…
Will the AI Bubble Trigger a Financial Crisis?
Experts might not expect a stock-market crash to cause a financial crisis, but what if they are wrong? With leverage built up in so many parts of the system and asset-price movements so closely correlated, the current US financial system looks like a tinder box just waiting for a spark to land on it.
Given the weakness in almost all other sectors of the U.S. economy, it could well mean a recession. However, economic falls come in many flavors, and the worst ones tend to result from financial crises. Still, most experts (with few exceptions) have not warned that the AI bubble will cause a financial crisis. On the other hand, the consensus seems to be that if there is a recession, it will look more like the one that followed the dotcom bubble …
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