Part 15/18:
Despite mounting signs of economic stress, markets remain buoyant, driven largely by AI-related valuations. Venture capital investments into AI startups have surged, with some valuing companies like OpenAI at half a trillion dollars. Total projected AI investment could reach $7 trillion by 2030, fueling a speculative bubble akin to the dot-com era.
This optimism may be perilous. If corporate spending on AI decelerates or technological advancements fail to deliver promised productivity gains, stock markets could crash, and economic stability could unravel. Policymakers are aware of this fragility but remain trapped by competing priorities—expanding deficits, inflation fears, and geopolitical tensions.