Financial markets have a habit of repeating themselves. They swell with optimism, inflate into bubbles, collapse under their own weight, and then—almost always—start climbing again.

By the Put-it-on Newsroom

Financial markets have a habit of repeating themselves. They swell with optimism, inflate into bubbles, collapse under their own weight, and then—almost always—start climbing again. 

We saw it with the toxic mortgage products that detonated in 2008, with the crypto craze, and with entire stock markets that seemed convinced gravity no longer applied to them.

Now, a growing number of analysts believe the AI industry is the next great bubble in the making. Investments in artificial-intelligence companies are not merely booming—they’re overheated. From where we sit in the Put-it-on Newsroom, the question hanging over global markets is clear: Are we nearing the peak of this AI wave, or is the crest still distant?

In the VPRO Tegenlicht documentary When Will the AI Bubble Burst?, Chinese economist Andy Xie delivers a stark warning. “America’s idea of winning is to create a God. That God will live in San Francisco. And the God works for America,” he says, summing up the geopolitical ambitions driving the current tech frenzy.

Xie, speaking from Shanghai, is known for his blunt, contrarian commentary on the financial tension between the U.S. and China. His analyses—published by Bloomberg and the South China Morning Post—are frequently provocative but rarely off the mark.

His track record is formidable. After early work at the IMF and a significant tenure at Morgan Stanley, Xie correctly flagged some of the biggest financial ruptures of the past three decades: the Asian financial crisis, the dot-com implosion, the 2008 credit meltdown, and China’s troubled housing market. As he often notes, he has never called a bubble that failed to reveal itself as one.

Now, he says, the “AI fantasy bubble” is nearing its breaking point. And in the world of high finance, timing that pop is the ultimate prize. Anyone who gets it right could walk away with a fortune.