A striking paradox is defining the AI era: Nvidia, the lead supplier, has soared to a $5.05 trillion valuation, while its corporate customers are struggling, with “nearly all AI pilot programs in businesses” reportedly failing.
This paradox is the crux of the “boom or bust” debate. How can the seller be worth $5 trillion if the buyers aren’t making money?
The “boom” perspective treats this as a temporary lag. They argue that massive transformation takes time and investment. They point to Nvidia’s $1 trillion growth in three months and its $500 billion order book as proof that the world is committed to this transition. Deals with OpenAI, Uber, and the US government show that key players are all-in.
The “bust” perspective sees this paradox as the definitive proof of a bubble. The IMF and Bank of England have both issued formal warnings, siding with the skeptics. They fear the spending is based on hype, not a sound business case.
Critics even question the $100 billion OpenAI deal, calling it “circular” inflation. If businesses can’t find a profitable use for AI, the demand for chips will eventually collapse, and the $5T valuation built on that demand will collapse with it.
