{"id":6877,"date":"2025-11-21T20:36:11","date_gmt":"2025-11-21T20:36:11","guid":{"rendered":"https:\/\/musictechohio.online\/site\/economist-ai-investments-digital-lettuce\/"},"modified":"2025-11-21T20:36:11","modified_gmt":"2025-11-21T20:36:11","slug":"economist-ai-investments-digital-lettuce","status":"publish","type":"post","link":"https:\/\/musictechohio.online\/site\/economist-ai-investments-digital-lettuce\/","title":{"rendered":"Top Economist Warns That AI Data Center Investments Are \u201cDigital Lettuce\u201d That\u2019s Already Starting to Wilt"},"content":{"rendered":"
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AI chipmaker Nvidia beat Wall Street expectations this week, announcing soaring revenues while downplaying growing fears of an AI bubble<\/a>.<\/p>\n

The company\u2019s chips have been at the center<\/a> of the ongoing AI boom, with AI companies\u2019 valuations soaring to astronomical levels while their revenues continue to lag far behind.<\/p>\n

Despite plenty of shakiness<\/a> in the market, investors still firmly believe that the trillions of dollars companies like OpenAI, Microsoft, and Oracle are planning to spend on AI infrastructure buildouts will one day deliver a return.<\/p>\n

But at the same time, economists are warning that those investors are overlooking some glaring problems with their plans to pile graphics processing units into enormous data centers to train and run immensely power-hungry AI models. For one, all of that hardware is degrading fast while running around the clock.<\/p>\n

\u201cYou\u2019re investing in something that is a perishable good,\u201d economist and author David McWilliams told Fortune<\/em><\/a>, calling AI hardware \u201cdigital lettuce\u201d that\u2019s \u201cgoing to go off now.\u201d<\/p>\n

Worse yet, GPUs could also become obsolete as the technology improves.<\/p>\n

\u201cTechnological change suggests that if you buy a GPU today, the chip is going to be outdated next year,\u201d McWilliams added.<\/p>\n

To McWilliams, it\u2019s a recipe for disaster. He argues that the AI trade is \u201cundoubtedly going to crash\u201d \u2014 and points out that the tech isn\u2019t creating any jobs, either.<\/p>\n

McWilliams isn\u2019t the first to point out some eyebrow-raising accounting in the sector. Michael Burry, who famously shorted the US housing market before its collapse in 2008, similarly argued earlier this month that AI companies\u2019 projected growth could be massively exaggerated, accusing them in a November 10 tweet<\/a> of assuming it will take far longer for AI hardware to depreciate to boost the numbers.<\/p>\n

\u201cBy 2028, Oracle will overstate earnings 26.9 percent, Meta by 20.8 percent, etc.,\u201d he wrote. \u201cBut it gets worse,\u201d he added cryptically.<\/p>\n

\u201cCompanies are always upgrading their servers and networking gear and chips, so it isn\u2019t a new factor, but we haven\u2019t seen it at this kind of scale before,\u201d Ameriprise Financial Services chief market strategist Anthony Saglimbene told Bloomberg<\/em><\/a>. \u201cThat\u2019s what is making investors nervous.\u201d<\/p>\n

While aging computer chips may feel inconsequential at first blush, they represent the beating heart at the core of the current AI hype. Firms have bet that scaling up these data centers will result in more capable AI models, a major assumption that experts are starting to challenge<\/a>.<\/p>\n

But even if the AI bubble were to crash, McWilliams is optimistic about the US economy surviving it largely unscathed and remaining the center of innovation.<\/p>\n

Others, however, have a far more grim outlook, warning of a potential collapse<\/a> that could send ripples through the financial market.<\/p>\n

More on the AI bubble:<\/strong> Nvidia Gloats as It Defies AI Bubble With Massive Revenue<\/em><\/a><\/p>\n

The post Top Economist Warns That AI Data Center Investments Are \u201cDigital Lettuce\u201d That\u2019s Already Starting to Wilt<\/a> appeared first on Futurism<\/a>.<\/p>\n<\/div>\n

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AI chipmaker Nvidia beat Wall Street expectations this week, announcing soaring revenues while downplaying growing fears of an AI bubble. The company\u2019s chips have been at the center of the…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[177,3841],"tags":[],"class_list":["post-6877","post","type-post","status-publish","format-standard","hentry","category-artificial-intelligence","category-ethics"],"_links":{"self":[{"href":"https:\/\/musictechohio.online\/site\/wp-json\/wp\/v2\/posts\/6877","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/musictechohio.online\/site\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/musictechohio.online\/site\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/musictechohio.online\/site\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/musictechohio.online\/site\/wp-json\/wp\/v2\/comments?post=6877"}],"version-history":[{"count":0,"href":"https:\/\/musictechohio.online\/site\/wp-json\/wp\/v2\/posts\/6877\/revisions"}],"wp:attachment":[{"href":"https:\/\/musictechohio.online\/site\/wp-json\/wp\/v2\/media?parent=6877"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/musictechohio.online\/site\/wp-json\/wp\/v2\/categories?post=6877"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/musictechohio.online\/site\/wp-json\/wp\/v2\/tags?post=6877"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}