Recently on The BetaKit Podcast, managing editor Sarah Rieger joined me to identify the biggest and brightest red flags indicating an AI bubble.
We left that conversation with a strong familiarity with the behaviour driving the markets into an AI frenzy while lacking any clear understanding of why it was happening. So we called in the big guns.
“The United States economy definitely has a cold right now. And when the US sneezes, the whole world catches a cold.”
According to economic commentator and New York Times bestselling author Kyla Scanlon, the United States has caught the AI bug—one that might fuel a public-markets pandemic.
OK, maybe it’s not that bad. Scanlon notes on the podcast that the consensus is the AI bubble will likely deflate through a slow release of air, given the amount of money and participants tied up in it.
That’s not to say there won’t be pain involved. Scanlon also spoke to the concerning connection between debt and the AI data centre buildout (which could go bad depending on how much gets borrowed and from whom), and how President Donald Trump has given AI companies the green light to drive the US economy with impunity. As Gen Z’s favourite economist, she is also keenly aware of the negative impacts of AI adoption on the labour market, particularly for young people.
This type of market analysis, which deals with what’s happening right now, inevitably leads to a discussion of what happens next, and Scanlon points to a few options, including reframing AI back to being a human-led tool.
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“The way that we’ve been talking about AI is this horrible Job-Killer 1000 bot, but in reality it could be just a complement to humans,” she notes.
Doing so might also require holding frontier AI companies accountable for their actions, and on this front, Scanlon is paying close attention to the tweets of Pope Leo XIV. What does the leader of the Catholic Church have to say about AI? Let’s dig in.
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