AI spending boom could trigger sharper downturn than dotcom crash: Professor Aswath Damodaran (opens original article in a new tab)

AI spending boom driven by massive capital expenditure could lead to a sharper economic downturn than the dotcom crash, with risks of defaults, wider economic consequences, and potential job displacement if market projections materialise.

• AI spending boom driven by massive capital expenditure could lead to sharper economic downturn than dotcom crash
• Heavy AI investment is largely debt-funded, increasing risk of defaults and wider economic consequences
• Structural shift in tech companies toward capital-intensive operations raises concerns about overreach and market delusion
• Damodaran warns of potential job displacement if AI market projections materialise