Almost half of all S&P 500 companies have a medium-to-high exposure to AI, according to estimates from Citigroup strategists, via Reuters. Collectively, those companies represent over $20 trillion in market capitalization, much of it driven by the recent excitement and rush to invest in AI as the next big thing. But there are more than whispers of a bubble forming, and with such great investment from the top companies, any sign of that bubble bursting could have catastrophic effects on those investors and the market as a whole.
Over the past year, we've seen an incredible revolution in AI infrastructure investment. Following Nvidia's call to build half a trillion dollars' worth of "AI factories" around the world, we've seen hundreds of billions of dollars invested (often in circular fashion) in a range of companies and countries. These investments prop up the valuation of the businesses involved, leading to new highs for the likes of Nvidia and Oracle. But in a rush to draw in investment, these companies have now exposed hundreds of the top firms to the risks of this new and largely unproven venture.
