What's interesting is the AI Bubble and how it's going to impact not just us, but the entire world, when it pops. And further, the China cold war:
US stocks now make up ~56% of the world’s public market cap; America’s Mag7 AI stocks in turn make up a third of the US market cap alone; and their AI infrastructure build-out alone is driving a ~third of all US economic growth.
So any ‘pop’ might rattle not just the US economy, but the world’s economy. It’d also hit a key pillar (US tech dominance) now balancing the world’s concerns about US political risk.
Second, an AI pop would have downstream impacts on other sectors like energy, where there are already countless billions in AI-related energy projects in the US alone.
And third, a pop would also shape US-China competition, which is already in turn shaping this century: Nvidia’s chips are now arguably America’s biggest source of leverage.
But the result of that leverage is the two rivals are now bifurcating into two parallel, algorithmic blocs built on parallel stacks and supply chains. So any AI pop — inevitably slowing US investments and therefore advances — could end up less like the global 2008 meltdown, and more specifically shifting our world’s centre of gravity even further east.