AI Friday: Is AI a Bubble?
- Jordanthecounselor
- 3 days ago
- 2 min read
$10 million is also $250,000 advances for 40 other books, which is my major complaint with giant deals like this. This isn’t to knock van der Kolk’s book—a book on mental health being so popular feels like a win—but fewer and fewer books getting larger and larger deals is a worrying trend. As with Joe “Human Graphic Tee” Rogan’s bloated $250 million Spotify deal or the nearly $8 billion dollars spent on Marvel movies since 2008, creative industries seem increasingly interested in chasing whales and netting big scores.
--James Folta
What does this have to do with AI?
This is an example of the K shaped economy. In a K shaped economy the upper class gets more and more, but the middle class gets less and less.
This is the economy in which we live. This is why people are afraid AI is a bubble.
In our present economy the top 10% of people do 50% of the spending. Since the amount of spending is how economists measure an economy, our economy looks strong.
Most of the people in the top 10% have jobs in tech or tech adjacent sectors. If AI companies run out of money, these people are out of jobs, their spending stops and we go into a depression. This is what people mean when they say AI is in a bubble. They do not mean AI technology is going away.
Just like the dot com bubble didn’t destroy the internet, just certain companies, the AI bubble won’t destroy AI, but could destroy some of the companies. And if those companies fail, it could send us into a depression.
The funny thing is, in a way this is motivation for AI companies to spend even more.
If they can get to artificial general intelligence before the bubble pops they can make a ton of money. But of course, this thinking only fuels more spending and makes everything even less stable.
If the economy is going to crash (and it is a big "if") when will it happen?
No one knows for sure.
But when I wrote my article AI is Reshaping Psychotherapy. We Have Two Years to Get Ready, I'd already been hearing economist (who weren't looking at AI) say that the period between 2025 and 2027 was critical.
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Jordan Harris Jordan Harris, Ph.D., LMFT-S, LPC-S, received his Doctor of Philosophy in Marriage and Family Therapy from the University of Louisiana Monroe. He is a licensed professional counselor and a licensed marriage and family therapist in the state of Arkansas, USA. In his clinical work, he enjoys working with couples. He also runs a blog on deliberate practice for therapists and counselors at Jordanthecounselor.com
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