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Are We Facing an "AI Bubble?"Powell's Remarks Shake Up the Unequal EconomyBy Estefanía Muriel for Ruta Pantera on 10/14/2025 10:43:38 AM |
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| In his recent appearance after the Federal Open Market Committee meeting, Federal Reserve Chairman Jerome Powell sounded warnings that go beyond inflation and interest rates: he spoke of signs of an economy that relies too heavily on the wealthy, fueled by a massive wave of investment in artificial intelligence (AI). A digital bubble? Structural inequality? A boom that might not be sustained over time? The context: AI revolution, unprecedented investment AI is no longer a mere promise. Big tech companies, hardware corporations, startups, data centers—all are investing at a rapid pace to build infrastructure, machine learning models, content generation, and logistics optimization. According to Powell, the U.S. “is seeing unusually large amounts of economic activity through the AI build-out and corporate investment” ( Powell, 2025, para. 16 ) ( Fed Press Conference, September 17, 2025 ). That statement acknowledges, for the first time publicly, that something extraordinary is happening: not just more spending, but a concentration of that spending. Inequality, selective consumption and systemic risk Powell also noted that while overall consumption has exceeded expectations, it “may well be skewed toward higher-earning consumers” and that there is “much anecdotal evidence” of this ( Powell, 2025, para. 16 ). This translates into a K -shaped economic structure : a widening gap between those who are fully participating in this technological boom and those who are barely feeling it. This bias is not neutral: ● Large AI investors and corporations reap benefits from scale, network economies, and intellectual property, while average workers may face job uncertainty, automation, and career displacement. ● Fiscal and monetary policies can become misaligned: inflation matters, but so does which sectors drive growth and which groups perceive it. ● Such a skewed economy could have localized bubbles: high prices for technology stocks, land for data centers, specialized hardware, etc., which may not correspond to social utility or fair economic resilience. | ||||
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AI bubble or real transformation? There is tension here: Powell does not claim that it is an irremediable bubble, but admits that “I don't know how long that will go on. No one does” ( Powell, 2025, para. 16 ). If it were a bubble, what could trigger it? ● An abrupt contraction in AI investment if returns do not justify the high operating costs. ● More aggressive interest rate adjustments in the face of persistent inflationary pressures, making borrowing for expansion less viable. ● Supply chain or regulatory issues affecting hardware, power, transportation, etc. But if it's a genuine transformation, the challenge will be how to better distribute those benefits, generate inclusive networks, and adapt education and social policies so that growth in AI doesn't leave behind those who don't master these specialized sectors. Examples: Who wins now? Think of giant chip companies, cloud platforms, and companies that use AI to automate processes. Their investment not only fuels the economic wheel, but also gives it speed. Now imagine a small travel agency in Latin America: Does it benefit in the same way? Can it use AI to improve logistics, marketing, and the tourism experience? Yes, but it depends on access to capital, training, and digital infrastructure. If these privileges are only enjoyed by the largest companies, the gap widens. Another example: luxury consumption (clothing, gadgets, exclusive travel, AI in smart homes) is on the rise, while more essential sectors (affordable housing, transportation, healthcare) are experiencing tightness. This discrepancy can deepen social and political tensions. | |||
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