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Experts divided over whether AI boom is a bubble or sustainable revolution

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The massive wave of investment in artificial intelligence has triggered debate across global markets over whether the surge mirrors the dot-com bubble or represents a sustainable technological revolution. Companies have poured hundreds of billions of dollars into AI infrastructure, fueling record valuations — but also investor caution.

A BofA Global Research survey showed that 54% of fund managers now believe AI stocks are in a bubble, compared with 38% who disagree, highlighting the growing divide between optimism and skepticism.

The Bank of England warned on October 8 that global markets could tumble if sentiment toward AI shifts, saying “the risk of a sharp market correction has increased.”

Other experts, however, see the AI boom as a long-term growth story. Goldman Sachs economist Joseph Briggs argued that the investment surge remains macroeconomically sustainable, though he noted that “the ultimate AI winners remain less clear.”

ABB CEO Morten Wierod echoed that sentiment, saying, “I don’t think there is a bubble, but we do see constraints in construction capacity,” adding that the industry is dealing with “trillions in investment” and limited human resources.

Amazon founder Jeff Bezos said investor enthusiasm is not inherently negative: “When people get very excited … every experiment gets funded. Some will fail, but society benefits when the winners emerge.”

IMF chief economist Pierre-Olivier Gourinchas compared the AI boom to the early 2000s tech frenzy but said it’s less likely to trigger a systemic crash because it’s not driven by debt.

OpenAI CEO Sam Altman offered a more candid view: “Are investors overexcited about AI? Yes. Someone is going to lose a phenomenal amount of money — and others will make a phenomenal amount.”

Despite these warnings, UBS strategists found that 90% of investors who believe in an AI bubble remain heavily invested, suggesting confidence in the sector’s long-term potential even as valuations soar.

Major Banks Explore Launch of Stablecoin Pegged to G7 Currencies

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Ten of the world’s largest banks — including Bank of America, Deutsche Bank, Goldman Sachs, UBS, Citi, MUFG, Barclays, TD Bank, Santander, and BNP Paribas — are collaborating to explore the creation of a stablecoin pegged to G7 currencies. The initiative marks another major step by traditional finance to adapt to the rapidly expanding digital asset sector.

The banks said the project, still in its early stages, aims to evaluate the potential of blockchain-based tokens backed 1:1 by real-world currencies. The goal is to determine whether a shared stablecoin system could combine the efficiency of digital assets with robust regulatory compliance and sound risk management.

This move follows renewed enthusiasm for stablecoins, driven by a resurgence in cryptocurrency markets and U.S. President Donald Trump’s open support for the sector. Yet global regulators remain cautious. Bank of England Governor Andrew Bailey and ECB President Christine Lagarde have both warned that private stablecoins could threaten financial stability and monetary policy.

Currently, stablecoins are mainly used within crypto markets rather than for everyday payments — about 90% of transactions involve crypto trading, according to BCG. The market leader, Tether, holds a dominant $179 billion share out of $310 billion in circulation.

As the global banking industry races to explore blockchain innovation, rival European lenders are also forming new consortiums, including one working on a euro-denominated stablecoin backed by ING and UniCredit.

CFPB ends Apple and U.S. Bank settlements early under Trump administration shift

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The Consumer Financial Protection Bureau (CFPB) has ended oversight agreements with Apple and U.S. Bank years ahead of schedule, according to recent court filings. The move is part of President Donald Trump’s broader effort to reduce CFPB enforcement and roll back settlements imposed during the Biden administration.

Apple’s settlement stemmed from a 2024 CFPB action that found the company and Goldman Sachs violated consumer protection laws by mishandling disputes on the Apple Credit Card and misleading customers about interest-free transactions. The original agreement required five years of enhanced compliance, but has now been cut short. Apple paid a $25 million civil penalty, fulfilling its financial obligation.

U.S. Bank, meanwhile, faced a 2023 settlement over allegations it illegally blocked unemployed consumers from accessing pandemic-era benefits. The deal also required five years of compliance monitoring. The bank has since paid a $15 million penalty, made restitution payments, and pledged corrective measures, leading regulators to end oversight.

The filings also reveal the CFPB under Trump has dropped oversight for other firms, including Toyota and Bank of America, while halting nearly all enforcement actions still pending when Trump took office.

Critics say the changes mark a significant retreat from the agency’s consumer protection role, while supporters argue that excessive monitoring placed unnecessary burdens on businesses.