Bubble Bursts

• The European Central Bank (ECB) has warned that the eurozone faces a potential financial crisis if the current artificial intelligence investment bubble bursts. • Concerns are driven by the fact that eurozone households have invested approximately €440 billion in US tech stocks, creating significant stability risks. • In a related development, a US tech giant is providing credit capped at $105 billion to fund a data center designed to house over one million AI chips.

• Experts warn that a potential AI bubble burst could severely impact India due to the extreme valuations of leading firms like OpenAI and Anthropic. • OpenAI is currently valued at approximately 40 times its sales despite being unprofitable and facing estimated losses of $15 billion to $20 billion this year. • Anthropic is similarly overvalued at around 20 times its sales while continuing to report financial losses.

• John Higgins, chief markets economist, concludes the AI stock bubble debated in late 2025 has already burst as of March 2026. • This marks the end of the hyped AI market surge, shifting investor focus amid ongoing tech sector volatility. • While one AI bubble deflates, a rare new growth phase in AI investments persists, per market analysis.