Lenny Mendonca & Martin Neil Baily argue that the current US investment boom is not analogous to the earlier dot-com and subprime bubbles.
Amazon ($100B), Meta ($600B+ over 3 years), Microsoft, Google, and Apple are pouring trillions into AI data centers. Unlike dot-com, the financing structure insulates the financial system; real-economy disruption remains the key policy concern.
Economics
Mar 9, 2026
Lenny Mendonca
and Martin Neil Baily
The AI boom may be speculative, excessive, and reminiscent of earlier episodes like the dot-com crash. But given the nature of the financing and the investments being made, the risks to the financial system are minimal, and policymakers should turn their attention to the impact of AI on the real economy.
Another key difference between now and the earlier boom-bust era is that the Federal Reserve is lowering rates instead of raising…
A look back at what we can and can’t learn from the dot-com and housing bubbles of the past.
The AI bubble doesn’t reflect reality. However, energy, economics and new infrastructure, not hype, are reshaping the cost and…
The IMF said any bust of AI bubble would be less likely to be a systemic event that would crater US or global economy.
“Is this 2000? Are we in a bubble? No,” BofA’s strategy chief Savita Subramanian said. “Will AI continue in unfettered…
The euphoria is drawing comparisons to the dotcom bubble of the late 1990s and the 2008 financial crisis.
