AI Concentration and Financial Stability Risks

AI is driving significant productivity gains but most of the financial value is being captured by a small set of firms that control data, cloud infrastructure, and specialized hardware. High-profile deals (for example, Reddit's $60 million pact with Google) and Nvidia's dominance in GPUs underscore how returns concentrate with platform and hardware owners. Analysts warn that investor exuberance and weak technical understanding have created bubble-like features reminiscent of the dot-com era, raising market-risk concerns. Massive AI capital expenditures—especially on data centers and information-processing equipment—are currently propping up U.S. growth, with a small share of investment driving a large share of recent GDP gains. New AI products such as people-search agents (e.g., Lessie AI) are reshaping career networking, and together these trends raise distributional and financial-stability risks that policymakers, investors, and workers must address.