<Part 4 of 5> News of my thoughts from past week (29Sep25)
News and my thoughts from the past week (29Sep25)
There are concerns about the AI Boom
The current AI boom is not sustainable, a new Deutsche Bank research note warned. AI capex is now so massive that it is keeping the U.S. out of recession, the bank said. Separately, Bain & Co. estimate there will be an $800 billion shortfall in the revenues needed to fund the demand for AI computing power. About half the S&P 500’s gains this year have been driven by tech stocks. Underlying real GDP growth excluding tech spending sits around 0% in 24 to 25, which implies the economy is hovering near recession. The current lift mostly comes from building data centers and power supply, not from AI software output, so the driver is construction and equipment orders. AI capital expenditure is huge with Goldman Sachs estimating $368B through Aug-25. Deutsche Bank says the tech cycle would need to keep accelerating quarter after quarter to keep adding to GDP, which is what parabolic implies, and that path is unlikely. Bain calculates that by 2030 the sector would need $2T in annual revenue to fund the compute yet even with savings the world is $800B short. Goldman expects productivity from AI to lift GDP by about 0.4% per year soon and 1.5% in total as adoption spreads, so a softer landing is possible. The balanced read is that productivity gains will arrive, but not fast enough to justify parabolic capital expenditure. - X user Rohan Paul
MIT - 95% of Generative AI projects are failing to deliver meaningful results despite $44 billion investment. How should we manage our AI integration? - Forbes
Dario Amodei wearing glasses and a blue sweater over a white shirt, standing in front of a red background with vertical stripes. Text overlay includes stock market data and the Business Insider logo.
Morgan Stanley cuts Adobe stock rating on AI doubts. Morgan Stanley just pulled back the reins on Adobe, cutting its price target to equal-weight from overweight, over its ability to cash in on the generative AI boom. - The Street
The first sign that AI was overhyped, and this market comes crashing down. The very first crack in the façade. I’ve never seen a market wound this tightly around a narrative since 2000. - X user Uncle Milty’s Ghost
A webpage screenshot from Futurism with the headline "Microsoft CEO Concerned AI Will Destroy the Entire Company." The text includes "It\'s a high stakes game" and a byline by Victor Tangermann, dated SEP 20, 3:30 AM EDT. Below the headline, a photo shows Satya Nadella, wearing glasses and a dark suit with a white shirt, standing next to a car.
“Oracle’s stock jumped by 25% after being promised $60 billion a year from OpenAI, an amount of money OpenAI doesn’t earn yet, to provide cloud computing facilities that Oracle hasn’t built yet, and which will require 4.5 GW of power (the equivalent of 2.25 Hoover Dams or four nuclear plants), as well as increased borrowing by Oracle whose debt to equity ratio is already 500% compared to 50% for Amazon, 30% for Microsoft and even less at Meta and Google. In other words, the tech capital cycle may be about to change.” - JPM’s Michael Cembalest
A world map with color-coded regions indicating autism prevalence rates. Dark red areas like North America show higher rates (250-400 per 100,000), while light blue areas like Africa show lower rates (0-50 per 100,000). Text overlays include "Autism rates globally" and a legend with numerical ranges.
A table displaying mortgage rate data. Columns include Average Rates, Current, 1 day, 1 week, 1 month, 1 year, and 52 Week Range. Rows list 30 Year Fixed, 15 Year Fixed, 30 Year FHA, 30 Year Jumbo, 7/6 SOFR ARM, and 30 Year VA rates, with numerical values and percentage changes. The title reads "Mortgage News Daily - Rate Index" with a data source note and last updated date of 5/26/25.
The average 30-year fixed mortgage rate today: 6.38% Same day last year: 6.21%. 10-year Treasury yield today: 4.19% Spread today: 219 bps - x user Lance Lambert
Those who live by leverage can die by leverage. Is it a posture of one who did not live within their means? Their strategy can implode due to leverage costs.
A line graph showing the pay gap between the highest and lowest income earners from November 2020 to August 2025. The y-axis ranges from 440% to 540%, with data points marked by a blue line and red trend arrows indicating an upward trajectory. Key points are highlighted with circles at November 2020 (480%) and May 2021 (around 428%). An ADP Research watermark is present at the bottom.
US income inequality is surging at a concerning pace: The pay gap between the highest and lowest income earners hit a whopping 526% in August, the second-highest reading in at least 5 years. Since May 2021, the gap has widened by 98 percentage points. In November 2020, the difference between the top 25% and bottom 25% of income earners was as much as 480%. This comes as the recent hiring slowdown has had a more negative impact on low-income earners. Income inequality is becoming even worse. - The Kobeissie Letter
Ray Dalio has said that ‘we’re heading into very, very dark times’
HIRING FOR NEW GRADUATES AT TOP 15 BIG FIRMS PLUMMETS OVER 50% SINCE 2019.
“Speculation creates bubbles but debt creates financial crisis.” - Ray Dalio.
New word every exec should fear: WORKSLOP Harvard & Stanford just released a study showing that AI junk looks like work but forces coworkers to spend time “decoding, correcting, or reworking colleagues’ AI outputs rather than doing original, high-value work.” - 42% say it makes peers less trustworthy - MIT says 95% of pilots deliver nothing. OUCH! - $30–40B burned, 5% impact AI adoption is everywhere. Productivity gains? Still MIA. - X user Amanda Goodall
A line graph tracking the market capitalization share of the Magnificent Seven—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla—in the S&P 500 from January 2024 to September 2025. The red line shows a fluctuating upward trend, peaking at 35% in September 2025. Dates and percentages are marked along the x-axis and y-axis, with a red circle highlighting the 35% peak. A watermark from econoviz is visible.
The “Magnificent Seven”: Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla hit a new milestone. Together, they now make up 35% of the S&P 500’s total market value, the highest share on record. Their combined market capitalisation has reached $20.7 trillion, a staggering jump from holding 29% of the index in 2023. That’s nearly one-third of the U.S. stock market concentrated in just seven companies. The surge highlights the outsized role of mega-cap tech in driving market gains, but also shows how dependent the S&P 500 has become on a small group of firms. When these stocks rise, the index soars. If they stumble, the risks spread across the entire market. - Stock Market News
A line chart displaying the percentage change in the US Dollar Index from 1991 to September 18, 2025. The chart shows a dense cluster of gray lines representing historical data and a prominent red line indicating the 2025 trend, which shows a significant decline. Text at the top reads "The US dollar is having its worst year in decades" and includes labels for years 1991, 2013, and 2025 along the y-axis, with months from January to September on the x-axis. A watermark from the Financial Times is visible.
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