AI Can Be Transformational and Still Be a Bubble

It’s hard not to marvel at how America’s capital markets have rallied to finance the artificial intelligence boom. If all goes as expected, “hyperscalers” such as Meta Platforms Inc. will invest more than $3 trillion through 2030 in data and power infrastructure. It’s an endeavor orders of magnitude greater than the Manhattan Project, funded entirely by private shareholders and creditors.

How, though, will the financial system and the broader economy cope if boom turns to bust? Curmudgeonly as such questions might seem, regulators should be asking them now, while there’s still time to adapt.