Welcome to the forefront of conversational AI as we explore the fascinating world of AI chatbots in our dedicated blog series. Discover the latest advancements, applications, and strategies that propel the evolution of chatbot technology. From enhancing customer interactions to streamlining business processes, these articles delve into the innovative ways artificial intelligence is shaping the landscape of automated conversational agents. Whether you’re a business owner, developer, or simply intrigued by the future of interactive technology, join us on this journey to unravel the transformative power and endless possibilities of AI chatbots.
The Michigan Daily
One hundred and thirty-five years of editorial freedom
Since artificial intelligence’s surge in popularity, its economic impact has been enormous, with AI stocks now making up 45% of the Standard and Poor’s 500. Investors have been very bullish on AI — it has fueled record growth in global markets and is projected to continue growing. AI investments accounted for 39% of gross domestic product growth in 2025. The stocks continue to rise as tech giants pump hundreds of billions of dollars into data centers and model training.
All of this sounds like economic promise, but there are growing fears among economists that AI innovation is creating a bubble in markets, meaning that the value of AI is rapidly surging above its innate value. The risks of a bubble popping are severe; in some cases, it can lead to market crashes and in others, it can lead to economic recessions. Many Americans are feeling a general anxiety about these trade-offs, an anxiety now paired with AI Hyperscalers demanding that the country invest nearly all of its available resources in this new infrastructure.
While tech CEOs are promising unlimited benefits, most Americans are worried about the physical impacts of data centers and the potential for AI-related unemployment. Investors and chief executives are betting on this emerging technology, without considering who will be left holding the bag if their gambit fails. The government must act to protect citizens from bearing the impact when this new market bubble bursts. Though executives and stakeholders in the industry are benefiting, everyday people are not, and the common man will feel the aftershock.
Although tech firms are making multibillion-dollar investments in infrastructure, actual progress on these projects is markedly slower than the growth of the companies backing them. This means that there is a discrepancy between what investors are being told about these companies and their actual fiscal prospects. It also means there is an enormous blind spot concealing what is actually happening in the AI space from an investor’s standpoint. And from the uninformed consumer perspective, the gap between AI’s observed value and alleged value is even wider.
OpenAI, the company behind ChatGPT, the most widely used AI chatbot, hit a valuation of $500 billion in October 2025 — a threefold increase since the previous year. Given the meteoric rise in value, it would stand to reason that OpenAI has a sound plan to deliver a return on investors’ capital. However, OpenAI CEO Sam Altman is on record saying that the company has no plan to generate revenue. Instead, Altman plans to use a theoretical super-intelligence to generate a return for investors: He plans to query a hyper-advanced chatbot: “Create a plan to make OpenAI profitable.” At present, Altman has no idea how to make this happen. If that sounds far-fetched, it’s because people have no idea what Artificial General Intelligence will look like in practice. AGI is theoretical in nature. This is a ludicrous strategy; it hinges on wide-eyed optimism about AI and people’s general misunderstanding of the technology.
Moreover, the strength of AI company valuations is already shaky at best. Chinese startup DeepSeek wiped out over $1 trillion in market capitalization in one day with the launch of its R1 model. Reportedly trained with only $6 million and older NVIDIA chips, the model challenged the validity of multibillion-dollar American AI investments.
If AI is indeed in a bubble, the eventual crash will hurt retirement accounts and overall economic health because AI is so integrated into our economy already. Growth in retirement accounts is linked to the stock market, so if the stocks rapidly fall, so will retirement accounts. AI profits are currently highly privatized, whereas the current and future potential losses are very socialized. Chief executives are driving around in luxury cars and proclaiming their technology as a benefit for humanity, while workers are being fired due to unrealized productivity gains.
On top of a seemingly impending stock market crash, AI is currently affecting labor markets substantially. Executives are making the argument that it’s logical to cut back on hiring when it’s cheaper to train large language models. Knowledge-based white-collar jobs are the ones on the chopping block, and firms across the board are laying off workers and freezing hiring because of the AI boom. Generation Z is the most adversely affected group. AI tools are being used to automate many entry-level positions, and companies across the country have been hiring fewer young Americans.
If the United States keeps accelerating its investments in AI rather than exercising restraint, our stock and labor markets will collapse when the AI bubble bursts. Tech firms are becoming too big to fail — if the U.S. continues its development of this technology in pursuit of profit, then we risk needing the federal government to bail out AI firms as we further entangle the U.S. economy with AI. This would be comparable to the banks bailed out during the 2008 financial crisis.
However, it doesn’t have to be this way.
Congress can prevent an economic disaster by creating government regulations for the development of AI infrastructure and implementing safeguards. Efforts are already underway — Sen. Bernie Sanders, I-VT, and Rep. Alexandria Ocasio-Cortez, D-NY, cosponsored a bill placing a moratorium on data center construction in the United States. If passed into law, this bill would set the precedent of governmental regulations on data centers, opening the door for policies to offset the high costs of building infrastructure. This would also stop the quickly inflating economic bubble and help to mitigate the widespread fallout of a burst. A more ambitious executive, less friendly to AI corporations, could look at nationalizing laboratories to share the excess profits with the masses who are currently being adversely affected.
We can also mitigate the societal costs of these data centers by having AI firms minimize their environmental impact. Anthropic, another leading AI firm, has pledged to cover increasing utility costs wherever its data centers are built. Other firms like Google and Aetherflux are investing in orbital data centers, mitigating water usage for cooling and utilizing solar power. Despite there being some mindful approaches to AI, the drive for profit is still dominating the current direction of development.
AI can be helpful when created and implemented mindfully. It has shown promise in detecting cancer, processing masses of data that are too tedious for humans to pore over and performing live translation, which bridges barriers in communication globally. But it must be done right.
The right approach is not to go the way of the Luddite, but to advocate for increased regulation of this fast-growing field, such as heavy taxation of AI firms, the aforementioned infrastructure moratorium, or, in the most extreme case, nationalization of AI. If we let the problem metastasize, the economic pain will be felt by everyone. We must change the course of AI development immediately, as the benefits of this powerful technology are accruing to a small club of CEOs and wealthy investors insistent that we stay the course no matter what.
John Rogan is an Opinion Analyst who writes about politics and technology. You may reach him at jerogan@umich.edu.
Please consider donating to The Michigan Daily
Stanford Lipsey Student Publications Building
420 Maynard St, Ann Arbor, MI 48109
Edited and managed by the students at the University of Michigan since 1890
[ditty id=484978]