In a Project Syndicate commentary, Brian Judge argues that the US financial system has become dangerously reliant on AI-related investment despite uncertain near-term returns, drawing parallels to historical bubbles such as the railroad boom and the dot-com crash. He criticizes a new Federal Reserve task force led by Governor Kevin Warsh for focusing on AI’s economic impact while omitting financial-stability risk from its mandate. Judge warns that if AI investments fail to deliver expected profits, the resulting market correction could prove severe for creditors and shareholders.
