Good morning. A frenzy of investment around AI has some investors seeing clear signs of a bubble, while others argue the demand is real. That debate is in focus today – plus, why we’re souring on our friends to the south.

Stock exchanges: The Canadian Securities Exchange is examining a purchase of Cboe Canada, in a deal that could transform the domestic capital markets landscape.

Infrastructure: Ontario and Manitoba struck draft agreements with the federal government this week to streamline reviews for major projects.

Steel: Ottawa is planning to limit foreign steel imports and cut interprovincial rail freight rates in a bid to support Canada’s industry.

History may not always repeat – but it does follow familiar boom-and-bust patterns, The Globe’s Joe Castaldo writes in his look at the forces shaping AI’s future. Each wave of transformative technology – from railways to electricity to the internet – arrived with sweeping promise and heavy financial risk. Artificial intelligence has triggered a faster, more concentrated rush of investment – and with it, the risk of a harder fall.

I spoke with Joe about how he reported the story, the capital chasing AI, and the stark divide over where this ends.

Are Canadian sectors indirectly tied to the AI buildout, even if we don’t have big domestic AI giants?

Energy companies are benefitting from the AI buildout. Remember that data centres require lots of electricity, and we don’t have enough of it, so new capacity is needed. Natural gas is seen as the fastest, cheapest and cleanest way to provide that power until (and if?) nuclear comes online.

Any company exporting or producing natural gas in the U.S., where the data centre bonanza is happening, may have seen some lift. Celestica has gone on a wild ride, too. The Canadian manufacturer builds network switches and other equipment for data centres. A graph of its stock price is pretty indicative of where AI investor sentiment is at.

Where are ordinary Canadians actually exposed to the AI boom?

Canadians would be exposed through any index funds or ETFs that track U.S. markets. The American tech giants, along with some other AI-related names, make up a substantial part of the S&P 500 these days. A correction in AI would likely hit the whole index.

What’s the simplest way to explain why AI spending is so massive – and why it might be a problem?

The spending is massive because of the belief that we need lots of data centres to build more powerful and sophisticated AI models, and to support growing usage of the technology. In Meta’s case, the company is trying to develop “superintelligence,” meaning AI systems that are smarter than humans.

The sentiment among tech companies is that it’s better to overbuild than underbuild. The financial returns, however, are not clear yet – and that’s why there’s concern. What if superintelligence never arrives?

If this does pop, what are the first signs Canadians would notice – either in markets or in the economy? Are we already seeing them?

Declining stock prices would be an obvious sign. That’s happening right now to some extent, despite Nvidia’s very good earnings report last week. What some observers, including Michael Burry of The Big Short fame, point out is that when bubbles deflate, stock prices lose steam before the underlying investment spending does. Nvidia can still be seeing demand and reporting great numbers even as investor sentiment has turned.

What did the people you interviewed disagree or agree about the most?

The most important question: bubble or no bubble? And, if there is a bubble, how bad could it get? (The short answer is anywhere between a minor blip and a recession.)

What’s the one unanswered question that kept nagging at you after you finished reporting?

I’m hung up on comparisons to the dotcom bubble. There are similarities to AI, but there are important differences too. I’m not sure if one outweighs the other. Maybe AI really is different. I guess we’ll find out.

Since Donald Trump returned to the White House spouting anti-Canadian rhetoric, people have soured on our southern neighbours in a way not seen since, well, the last time Mr. Trump was President. Two-thirds of Canadians view the U.S. unfavourably, a sharp reversal from a decade ago, when just one-quarter felt that way.