Is a Bubble Forming as AI Investments Drive Economic Growth?
Explore how AI investments are driving economic growth and sparking concerns about a potential tech bubble.
Note: If you are short on time, watch the video and complete this See, Think, Wonder activity: What did you notice? What did the story make you think about? What would you want to learn more about?
Tech companies are pumping hundreds of billions of dollars on infrastructure to ramp up artificial intelligence. Some projections show the spending may be fueling nearly half of this year’s estimated GDP growth. Economics correspondent Paul Solman looks at how AI is already impacting the economy, and whether a new risky bubble could be forming simultaneously.
View the transcript of the story.
Key Terms
gross domestic product (GDP) — the total value of all the goods and services produced in a country over a given time period.
financial bubble — An economic event when a sector or industry attracts investment far exceeding actual value. Bubbles often "burst," leading to a sharp downturn in financial markets.
Discussion Questions
- What are some of the things tech CEOs are saying to promote AI?
- How much money has been invested in AI, and what fraction of the total GDP (see definition above) does this investment represent?
- Who (interviewed in this segment) is skeptical of the size of market for AI and believes that the field is a bubble that will burst?
- When have other tech-based bubbles burst and impacted the U.S. economy?
- Why might most AI firms fail, according to this segment?
Focus Questions
- Do you think AI companies and products will continue to grow and become more important to the economy, or will the bubble burst in the near future? Why do you think so?
- What uses for AI do you think are most essential to the economy in the long-term? Another way of thinking about this question — what AI-based services do you think you or others would pay money to use?
- Media Literacy: Were there any terms or economic ideas presented in this segment that you didn't understand? If so, where could you go to find out more?
Extension Activity
In this segment, entrepreneur Vivek Wadhwa says, "None of us really understand how fast things are moving and where we're going to be even five years from now."
Knowing that even those at the forefront of developing AI technology are uncertain about its impact on the economy and society, what role should the government take in regulating (or supporting) AI companies?
- First, research 1-2 stories about the impact AI is having on the economy, U.S. culture and society. You can browse through some of our past news lessons or browse the web.
- You might also watch the segment below about the ways the Trump administration is approaching regulating (and developing) the AI industry.
- Finally, write the text of a regulation that you would pass (you could keep it short—just a sentence or two) to limit potential negative impacts of AI or encourage positive ones.
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Republished with permission from PBS News Hour Classroom.
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