Former US Treasury Secretary Robert Rubin warned on October 7, 2026, that the AI investment boom could create financial and social risks for both the economy and markets. He cautioned that current valuations may not fully reflect the uncertainties tied to the scale and speed of spending on a technology still proving its returns. His analysis centers on the concept of circularity risk: the overlapping commitments between chipmakers, customers, software firms and investors could amplify losses if expected returns fail to materialize. Ray Dalio voiced similar concerns the same day, highlighting risks from debt-financed spending in the AI sector and fears of a potential market bubble.
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