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Category: Economics/Business

Are the AI hyperscalers engaged in the ‘largest misallocation of capital in history’?

Are the AI hyperscalers engaged in the ‘largest misallocation of capital in history’?

David Rotman writes: When Jessica Wachter, a finance professor at the University of Pennsylvania’s Wharton School, wanted to assess AI’s impact on the economy over the next few years, she faced a long list of business and technical uncertainties. So she started with what she calls a “remarkable fact” that is not in question: A handful of so-called hyperscalers are investing huge amounts of money to build AI data centers. Instead of trying to predict how useful and widely deployed…

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Economic strain is pitting China’s people against each other

Economic strain is pitting China’s people against each other

From Beijing, Helen Gao writes: For years, the mood in China has been darkening. A weakening economy has left many disillusioned, a state of mind expressed privately and across the heavily controlled internet in lowered expectations and quiet anxiety. Some of that may now be surfacing in more troubling ways. In March, a man drove a heavy construction vehicle through an outdoor market in a Beijing suburb, reportedly killing several people. In June, a small aircraft crashed into a prominent…

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Amazon’s $1 billion plan to combat data center backlash draws more backlash

Amazon’s $1 billion plan to combat data center backlash draws more backlash

Ars Technica reports: On Friday, Amazon committed to donating more than $1 billion over the next five years to communities neighboring data centers. In a press release, Amazon Web Services’ CEO Matt Garman said that communities would decide how to prioritize funds across “education, job training, energy affordability, water, and energy preservation, and local priorities.” Laying out other community commitments, Amazon also promised to ensure data centers wouldn’t increase power bills or wipe out local water supplies. Regarding the latter,…

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How Jared Kushner has profited from the Gaza genocide

How Jared Kushner has profited from the Gaza genocide

CNN reports: At the same time Jared Kushner has acted as a key negotiator in the war in Gaza, his private equity company, Affinity Partners, has held the largest stake in an Israeli firm backing businesses involved in Israel’s military campaigns, a CNN investigation has found. Kushner has skirted deeper scrutiny of this potential conflict of interest by acting as a volunteer envoy, rather than accepting a government job that would require him to disclose his finances. In the process,…

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How Meta uses AI data centers to avoid billions in federal taxes

How Meta uses AI data centers to avoid billions in federal taxes

The New York Times reports: Mark Zuckerberg says Meta’s A.I. push is a tremendous success. “Our investments in A.I. are accelerating every major part of our core business,” he has told investors. “Every sign that we’re seeing in our own work and across the industry gives us confidence in this investment.” But when Meta files its taxes, it tells the Internal Revenue Service a different story. It claims that its A.I. data centers are a giant experiment that could fail,…

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The coming AI economic meltdown

The coming AI economic meltdown

Robert Kuttner writes: A new report to be presented today at the Brookings Institution shows that the total cost of the AI build-out through 2032 will be $10.3 trillion. That amounts to 3.63 percent of GDP per year, many times that of previous large-scale infrastructure investments, from the 19th-century canals, the railroads, telephone, and electric grids, to the interstate highway system. And unlike AI, whose benefits are speculative, unproven, and with hard-to-fathom risks, these earlier investments in infrastructure more than…

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Trump brought gold from Venezuala’s notoriously corrupt industry to the U.S. but refiners won’t touch it

Trump brought gold from Venezuala’s notoriously corrupt industry to the U.S. but refiners won’t touch it

The New York Times reports: In early March, as President Trump basked in the success of a military intervention in Venezuela, he joined Interior Secretary Doug Burgum in the West Wing for a private celebration. A businessman also attended, and brought along a pile of gold. The president looked approvingly at the 10 Venezuelan gold bars stacked in the Roosevelt Room, across from the Oval Office, White House officials recalled. Aides took photos and joked about keeping the gold. Mr….

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AI is pushing medical costs higher

AI is pushing medical costs higher

The New York Times reports: In the latest sign that artificial intelligence is fueling higher health care costs, a group of insurers released a report Thursday claiming that hospitals’ use of A.I. was responsible for nearly $1 billion in additional expenses over two years. Using codes for various medical conditions, hospitals submitted claims for tens of thousands of patients that described their illnesses as more complex in 2024 and 2025 than in 2023. Despite the added conditions, there was no…

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Sam Altman-backed Praxis plans $1 billion AI-powered city in Uruguay

Sam Altman-backed Praxis plans $1 billion AI-powered city in Uruguay

The New York Times reports: The American tech utopians had spent years scouring the globe for a place to build their city of the future. The founders of Praxis — a company and online community backed by hundreds of millions of dollars in financing from a crypto company — surveyed the Mediterranean region, but say it was too close to active conflicts. They said they had mulled buying Greenland, but faced public pushback. Now, they claim to have finally found…

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Crypto industry weighs the risks of alienating Democratic lawmakers

Crypto industry weighs the risks of alienating Democratic lawmakers

Politico reports: The cryptocurrency industry is at a political crossroads. Reeling from the demise of its longtime top legislative priority, crypto companies must now decide how scorched-earth to go against Senate Democrats, who last week voted unanimously against the so-called Clarity Act, a sweeping bill that would create a bespoke new regulatory framework for digital assets. A crypto-backed PAC network’s move this week provides a hint of what may be to come. The group, known as Fairshake, announced it would…

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AI’s flimsy house of cards puts markets and U.S. economy at alarming risk

AI’s flimsy house of cards puts markets and U.S. economy at alarming risk

Bloomberg reports: The heads of America’s leading AI development labs have started a national conversation about tapping the brakes on a technology that’s offering so much promise for society, while at the same time showing it can do a frightening amount of harm. It’s a debate that needs to be had, and a real solution invariably will be hard to come by. But considering the trillions of dollars of investment gains and market value that have been built on the…

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Cory Doctorow: This is how the AI bubble pops

Cory Doctorow: This is how the AI bubble pops

  “If enshitificaiton is what you do when you’ve grown your market all you can and then you squeeze it, then AI is what happens when you run out of squeezing.” Author of The Reverse Centaur’s Guide To Life After AI Cory Doctorow join The Tech Report’s Isaac Pound to talk about the the narrative and economics of Artificial Intelligence and why the AI bubble needs to end sooner rather than later.

The world economy is becoming wary of the U.S.

The world economy is becoming wary of the U.S.

The New York Times reports: Global investors are balking at U.S. bonds. Talk of the dollar’s dwindling power is getting louder. Foreign governments are hauling their gold out of American vaults. Almost two years into President Trump’s second term, the world economy is increasingly looking for ways to distance itself from America. Concerns about a $40 trillion debt burden, the excessive use of sanctions to solve foreign policy problems and Mr. Trump’s penchant for pushing the limits of the rule…

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AI is taking over job interviews

AI is taking over job interviews

CNBC reports: For both job seekers and employers, AI has already permeated almost every step of the hiring process, from evaluating resumes to writing cover letters. The latest frontier is job interviews. Rather than hopping on a phone or Zoom call with a human recruiter, candidates are increasingly being asked to speak with an AI interviewer as the first step in the hiring process. Nearly two-thirds (63%) of 2,950 active job seekers surveyed by Greenhouse, a hiring platform and applicant…

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‘Tidal wave’ of forever chemicals being launched to satisfy AI industry, campaigners warn

‘Tidal wave’ of forever chemicals being launched to satisfy AI industry, campaigners warn

The Guardian reports: Pfas [Per- and polyfluoroalkyl substances] companies are launching a “tidal wave” of forever chemicals production to meet demand from the AI industry, a campaign organisation has warned. Despite alarm over the chemicals, which have been linked to cancer, a survey of the 10 biggest manufacturers found most had plans to increase production. Many frame their investments around the “AI revolution”, because of the role Pfas play in semiconductor production and next-generation datacentre cooling systems. But opponents warn…

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Corporate tax payments plunge as AI feasts on new incentives

Corporate tax payments plunge as AI feasts on new incentives

Politico reports: Corporate tax payments are plummeting even as profits soar. A big reason: all that AI spending. The tech world is pouring oceans of money into chips, data centers, power supplies and other components of the artificial intelligence infrastructure. And that’s eligible for generous tax breaks on investments Republicans included in their 2025 tax cuts. The tax incentives weren’t designed with AI in mind specifically — they’re available for all kinds of business investments. But it’s the tech industry…

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