Apollo Economist Warns AI Investment Cycle Outpaces Housing Boom

Chief economist at Apollo Torsten Sløk reports that the artificial intelligence investment cycle is expanding at nearly twice the pace of the 2000s housing boom at its peak. While the total AI buildout remains smaller as a percentage of US GDP than the housing boom was, its growth rate exceeds both the residential real estate market from 1996 to 2008 and the telecom buildout of the dot-com era.

Sløk warns that this rapid growth creates a significant macroeconomic risk. He argues that if AI demand disappoints, the subsequent unwind could be severe, drawing a parallel to how the sharp decline in home values exacerbated the 2008 financial crisis.

Investor Michael Burry highlighted the analysis to support his previous warnings regarding an AI investment bubble.