Steve Keen Predicts AI Bubble Bursts Within 1 Year as Revenue Covers Only 20% of Costs
Updated
Updated · Kitco NEWS · Aug 24
Steve Keen Predicts AI Bubble Bursts Within 1 Year as Revenue Covers Only 20% of Costs
1 articles · Updated · Kitco NEWS · Aug 24
Summary
Less than 1 year is Steve Keen’s timeline for an AI bubble collapse, arguing sustained user revenue is only about one-fifth of what AI firms are spending.
More than $410 billion has been borrowed this year for data centers and other AI investments, while Keen says fast GPU obsolescence forces costly reinvestment every three to four years.
Keen does not expect a 2008-style banking crash, saying new borrowing is only 4% to 6% of GDP versus a 15.4% peak in 2006; instead he sees supply disruptions triggering a patchwork of corporate bankruptcies.
Gold, in his view, is not a one-way hedge: it can fall in a real crisis if leveraged investors sell it to meet losses elsewhere.
His broader warning is that private debt—not government debt—remains the main risk, with aggregate private debt still around 150% of GDP versus roughly 170% at its peak.