The AI Bubble Inflating the Market Artificial intelligence has become the latest prop holding up an overextended equity market. For the past three years, AI mania has driven stocks to record highs despite occasional drawdowns. The frenzy has all the hallmarks of a super-bubble: uncritical media adulation, sky-high valuations, and a general belief that “this time it’s different.” None of this guarantees an imminent crash. Bubbles can persist far longer than skeptics expect. Yet when the unraveling does arrive, it could easily erase 50% or more of current market value. Investors who assume that a handful of AI darlings will float the entire index indefinitely should recall how quickly sentiment collapsed in 2000. Reducing exposure to equity and increasing cash…
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