The only thing more mainstream than trashing Taylor Swift’s latest album is saying that AI is a bubble. The International Monetary Fund and the Bank of England joined a choir of financial institutions this week sounding a bearish alarm, warning that the global economy will suffer if optimism about AI fades and the markets currently carried by AI investments crash. Meanwhile, JPMorgan CEO Jamie Dimon said that even though he believes benefits from the tech are real, many investors will lose money, with the market underappreciating the risk of a downturn. But the anxieties are far from consensus opinion on Wall Street, with several banks releasing research this week suggesting that “bubble” might be a misnomer. Banks say: not quite a bubble Goldman Sachs said that, despite an outsize share of the global stock market’s value coming from only a handful of companies pumping billions into AI (which it acknowledged is unsustainable), Big Tech’s earnings are growing at a strong pace. The bank also noted that AI players are largely using their own massive cash piles to finance AI infrastructure, rather than relying on debt. Similarly: - Morgan Stanley pointed out that S&P 500 companies are generating three times the cash flow as a share of their valuations as they were in the lead-up to the dot-com bubble bursting in 2000.
- Bank of America said that so-called circular deals—like the one in which OpenAI recently received a $100 billion investment from Nvidia, which it’ll use to buy Nvidia’s chips—account for a fraction of AI funding
But even if it’s revolutionary…AI can still lead to a market crash, with Bain and Company estimating that annual revenue from the technology would have to be $2 trillion by 2030 to justify all the investment. And skeptics point out that, unlike with overinvestment in railroads and fiber-optic cables that underpinned previous bubbles but still led to productivity growth down the road, the costly AI chips running data centers need to be replaced every few years.—SK | 
Trump says Israeli hostages will be returned early next week. A day after Israel and Hamas said they had agreed to the first phase of a US-brokered ceasefire in Gaza, President Trump said that Hamas