Jerome Powell underlined that the ongoing surge in artificial intelligence investment is not simply a replay of the dot-com boom of the late 1990s. Unlike many internet era companies that boasted lofty valuations without proven revenues, he emphasised that today’s prominent AI firms “actually have earnings and stuff like that”. Powell argued that this fundamental difference means the current wave has more structural substance.
He also pointed out that spending on AI infrastructure—such as data-centres, specialised chips, and new forms of computing—is becoming a significant driver of economic growth and productivity. In his view, the surge in capital expenditure and real-world deployment differentiates this wave from past speculative bubbles.
Still, Powell flagged caution: even though the sector has stronger underlying earnings than the dot-com era, “we’re watching that very carefully” in terms of its impact on labour markets and broader financial stability. He noted that many companies are redesigning hiring and operational models in light of AI, signalling that the transition is still unfolding and requires active monitoring.
For India and other global economies, the takeaway is two-fold: first, the AI opportunity may be more than hype—it may offer genuine productivity transformation; second, stakeholders should not assume risk is absent. The hardware, compute infrastructure, skills-upgrades, and economic-policy alignment will matter considerably in turning this opportunity into sustainable growth.
