Economists issue warning as AI spending grows larger than consumer shopping. Is an epic speculative bubble forming?

Photo above - the Borealis Data Center, north the arctic circle. Locations like this are becoming popular with AI companies, because they won't have huge electric bills to cool the servers. Many days they can just leave the back door open.

What do Apple, Nvidia, Amazon, Google, Meta, and Microsoft have in common? They’re spending more to build AI hardware and write code than the rest of us are spending on groceries, gasoline, etc. (see link below).

It's not just those 5 companies alone. The second layer of AI players includes names like Oracle, Adobe, IBM, Rockwell, AMD, Taiwan Semiconductor, and about 200 other companies. If your retirement account has shares in an S&P 500 index fund, like the experts recommend, you’re part of the bubble. In fact, the top 20 companies in the S&P 500 index are all big AI players. You have to go waaaay down the list to find something like Netflix, which has apparently not yet built a data center with 100,000 Nvidia chips requiring it’s own nuclear power plant for power. However, August isn't over yet - Netflix may yet announce a ginormous new server north of the arctic circle later this month.

If someone asked you if home flipping-rental-investment properties ever become larger than consumer spending, you’d say 2008. If someone asked you when people borrowed recklessly to dive into the stock market, investing more each month than their rent, you’d say 1929. Anyone remember the dot-com bubble of the 1990s?

I feel like there’s nothing I can do to protect myself from what's coming. Even if someone didn’t personally hoard tulips in 1637 in the Netherlands, when bulb prices finally collapsed their neighbors were impoverished. Shops closed, banks failed, and kids went begging in the streets. Their parents followed the advice of experts that tulip bulbs would be the key to a secure financial future.

Today we’re being told the key to our prosperity is the S&P 500 index. Which is loaded with tulips – I mean AI companies. That, and cryptocurrency, like Bitcoin. Supposedly everyone's financial future is dependent on these.

I’m just sayin’ . . .

Spending on AI data centers is so massive that it’s taken a bigger chunk of GDP growth than shopping—and it could crash the American economy