Experts Warn of AI Bubble and Systemic Risks

The artificial intelligence sector's explosive growth has sparked widespread concerns about a potential investment bubble, with experts warning that its deepening integration into economies could make it too big to fail, potentially burdening taxpayers much like the 2008 financial crisis. Major tech companies are ramping up spending on AI infrastructure, projecting costs of up to 7 trillion dollars over the next five years, while governments and investors pour billions into the technology despite evidence of widespread project failures.

Global AI firms now hold a combined market value exceeding 2 trillion pounds, far surpassing the scale of banks during the 2008 crisis, when UK taxpayers covered 23 billion pounds in bailouts and their US counterparts shouldered 498 billion dollars. Interconnections among AI companies through investments and deals worth hundreds of billions create systemic risks, analysts say. A recent study found that 95 percent of generative AI pilots in companies have failed, yet funding continues unabated. In the UK, the government has committed to full adoption of AI across education, defense, health, courtrooms, and passport services, embedding the...