AI Boom: A Good Bubble or a Financial Risk?

2026-08-16

Nature of the AI Boom

The artificial intelligence (AI) boom centered on the United States has grown to the point that the pace of capital expenditure expansion is outstripping major past booms. The Bank for International Settlements (BIS) sees the current investment fervor as taking on the characteristics of a new bubble.

The Industrial Bubble Side

Amazon.com founder Jeff Bezos referred to 'good bubbles' and 'bad bubbles' at a tech-related gathering in Turin, Italy, in October 2025. An industrial bubble accompanied by innovation such as AI may, unlike a speculation-driven financial bubble, leave behind a foundation for future growth. Marcus Brunelmaier, a professor at Princeton University, and others also distinguish between bubbles that involve technological innovation and those that do not.

Policy and Financial Caution

Even so, as history shows, bubble expansions and collapses have left deep scars on financial systems. Ryutaro Kono, chief economist at BNP Paribas Securities, sees the AI boom as 'quite a boom' in both the real economy and finance. Taisho Matsuura, chief US and European economist at Mizuho Research & Technologies, says there are similarities with the IT boom era, but notes that the ratio of private debt outstanding to GDP remains contained.

Conditions for Spreading the Benefits

Masaaki Sako, professor emeritus at Keio University, views AI as a 'good bubble' and says it could serve as a catalyst for shifting Japan from savings to investment. However, if AI merely replaces human work, inequality could widen. The key to maximizing the benefits will be whether it can complement and extend human tasks and lead to new employment and higher productivity.

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