Paul Kedrosky: AI is the First Bubble With Every Ingredient at Once | #648

Today’s guest is Paul Kedrosky, a fellow at the MIT Institute for the Digital Economy, partner at SK Ventures and former sell-side analyst.

In today’s episode, Paul Kedrosky explains why AI sits at the intersection of every force behind the biggest bubbles. He walks through why tokens are the fastest-deflating commodity ever, why more than half the data center buildout runs on debt instead of cash flow, and why an IPO wave pressures the market’s biggest winners.

To close, Paul argues AI already drives most US GDP growth, and revisits how badly humans misjudge scale.

(0:00) Introduction

(1:19) AI solving its own problems and historical economic crises

(3:14) The impact of AI on energy and emissions

(7:25) AI’s economic implications

(10:45) Financing and economic impact of data centers

(18:42) Deflationary effects of AI tokens and tech company debt

(22:26) Tech companies as utilities and the IPO surge

(28:01) High PE ratios and valuation risks

(34:04) AI model convergence and diminishing returns