(NewsNation) — The AI boom has many drawing comparisons to the dot-com bubble, but Federal Reserve Chair Jerome Powell says the two aren’t the same.
“This is different,” Powell told reporters Wednesday. “The companies that are so highly valued actually have earnings and stuff like that.”
During the dot-com era, by contrast, many were “ideas rather than companies,” Powell noted. “So there’s a clear bubble there.”
The Fed chair’s comments come amid concerns that investment in AI may be running ahead of its payoff — leaving the stock market and broader U.S. economy on a potentially shaky foundation.
Just this week, Bill Gates told CNBC he sees parallels to the internet bubble, with some winners — but a lot of losers.
“There are a ton of these investments that will be dead ends,” Gates said.
Even so, he called AI the “biggest technical thing” of his lifetime and said, “Some of these companies will be glad they spent all this money.”
In dollar terms, Google, Meta, Microsoft and Amazon are set to spend nearly $370 billion this year on data center construction alone, according to The Washington Post.
Harvard economist Jason Furman recently estimated that more than 90% of demand growth in the U.S. economy during the first half of the year came from just two GDP categories — information processing equipment and software.
Powell acknowledged Wednesday that AI investment is “clearly one of the big sources of growth in the economy” but added that consumer spending remains the dominant force.
“The consumer is spending and that’s a big, big chunk of what’s going on in the economy, substantially bigger than AI,” Powell said.
But even consumer spending comes with an asterisk. High earners have kept their wallets open, while lower-income households are feeling the heat — setting up a “K”-shaped economy where one branch rises while the other falls.
When asked about the bifurcated economy, Powell said policymakers “think there’s something there,” citing earnings calls from major companies that have highlighted growing strain among lower-income consumers.
Powell’s remarks came after officials voted to cut interest rates for the second time in six weeks — a move aimed at supporting the cooling labor market.
While it’s unclear if that weakness has accelerated recently due to the government shutdown-driven data blackout, the cool-off has coincided with the rise of AI.
“You see a significant number of companies either announcing that they are not going to be doing much hiring or actually doing layoffs,” Powell said. “And much of the time, they’re talking about AI and what it can do. So we’re watching that very carefully.”
He added that the technology “could absolutely have implications for job creation.”
Is AI the next dot-com bubble? Here’s why Powell thinks it’s different IUSTITIA.BG – Investigations 2009-2025 2025-10-30 19:04:52 Latest news World news Country news Most important news latest news most important latest of the day Justice Petar Nizamov Feathers Petar Nizamov- Feathers Justice bg iustitia.bg iustitia iusticia usticia investigation Burgas Bulgaria news news of the last hour news of the day news of today Bulgaria news The news from Bulgaria blitz news top news most important most commented latest news Boyko Borisov news weather coronavirus news news weather facebook youtube facebook instagram news today news of the last minutes news today today news news bg news leading news hot news bg news site for news all news news bg news of the last hour latest latest news bg news of today news today news today news of the last hour latest news today news bg news news 24 hours news vesti bg novini news world bird bg bivol bg bivol trud bg novini latest news today novinite bg news hello bulgaria political party coat of arms delyan peevski scandalous Bulgarian National Television Free Europe Television scandal exclusive live tv live right now tv tv online tv program bg live now tv news online tv online live court Burgas court Burgas district court Burgas court Burgas district court Burgas district court Burgas appellate court Burgas prosecutor Burgas prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Prosecutor General Ivan Geshev Prosecutor Geshev Tsatsarov Ministry of Internal Affairs Burgas ODMR Burgas ODPR Burgas police Burgas district police Burgas prosecutor Tsatsarov SGS cases Varna court chairman of the SGS court decisions on civil cases decisions on cases Plovdiv court decision of the court decisions cases Varna court criminal cases district district court decisions work in the court SGS chairman of the SGS judges Sofia court post judges Plovdiv court Plovdiv judges Plovdiv Supreme Court Inspectorate Supreme Court Supreme Judicial Council lawyer lawyer criminal cases lawyer civil cases lawyer marriage cases lawyer administrative criminal law criminal process civil law civil process administrative law constitutional law
