Kedrosky: Justifying AI spending with historical bubble theory drives dangerous overbuilding
Paul Kedrosky · Why The AI Bubble Will Burst: The Most Logical Case — With Paul Kedrosky · Aug 12, 2026 · at 37:34
Investor Paul Kedrosky critiques tech investors relying on Carlota Perez's technological revolution frameworks to rationalize massive AI capex.
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“We've created this reflexivity. We're now, we justify overspending on the basis of prior overspending having worked out. Well, in prior episodes where that happened, people were not justifying the overspending by saying, say, in rural electrification, you know, this may look bad, but it worked out in railroads. No, no, no, no, no. You don't get to play that game. We didn't have that. So now what's happened is it's become a hermetically sealed, almost a flywheel in a sense, because we're justifying things on the basis of information that we didn't have in prior episodes. And using that to justify an even larger overbuilt.”
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