Despite AI capex driving 2025 growth, valuations of Nvidia, the cloud providers, and leading labs show only moderately elevated price-to-earnings ratios. Investors seem to expect competition and falling margins to limit supernormal profits, contrary to popular 'AI overlord' stories.
— This challenges policy and media narratives that assume inevitable extreme inequality from AI by pointing to market signals that predict dispersed gains rather than monopoly capture.
Tyler Cowen
2025.09.15
70% relevant
Both argue markets are not pricing extreme AI outcomes; here, bond yields drop after AI releases—consistent with markets not expecting explosive growth or monopoly rents from AI and perhaps discounting tail extremes—complementing equity valuation evidence.
Noah Smith
2025.08.10
100% relevant
Paul Kedrosky’s data on AI capex outweighing consumption growth, Nvidia’s ~$4.5T valuation vs. sub-$1T combined for top labs, and the S&P 500 PE near ~30.
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