AI Investment Surge Fuels Asian Stock Growth, Risks Bubble

The surge in artificial intelligence (AI) investment is driving significant gains in Asian tech stocks and fueling a boom in Australia's data center market, as companies rush to expand infrastructure to support AI growth. However, experts like fund manager Ruchir Sharma warn that the Federal Reserve’s potential rate cuts amid this enthusiasm for AI could create a dangerous asset bubble, amplified by speculative market behavior and loose financial conditions. Despite the massive capital expenditures by tech giants on AI infrastructure, much of this spending is effectively an investment in versatile data centers and hardware that retain value even if AI hype diminishes. In the U.S., the AI boom is boosting GDP growth, yet skepticism remains about whether real productivity gains will materialize, with some drawing parallels to the dot-com bubble of the early 2000s. This mixed outlook is reflected in fluctuating stock markets, where tech valuations soar but also face investor concerns about sustainability. Overall, while AI investment is reshaping technology and real estate sectors globally, caution is advised due to the risks of overvaluation and speculative excess.