https://t.co/1MMOtfZuuj [Signs of an AI Bubble Burst] Emin Gün Sirer × Kazunari Okuno × Yoshinori Shigemi × Norihiko Sasaki: Will AI Regulation Intensify After the Midterm Elections? Can OpenAI Go Public? The U.S. May Prefer Treasuries Over Stocks [Money Super Forecast] PIVOT Official Channel #AISummary Big Forecast for the 2027 Stock Market: AI Bubble Burst, Rising Interest Rates, and the Future of Japanese Equities 🔳 Market in 2026: Extreme Concentration on AI-Related Companies While performance and stock prices have surged among AI and semiconductor firms, general consumers are struggling with inflation. The growing divergence between corporate earnings and GDP growth versus real economic conditions suggests that this imbalance may soon be corrected—either through improved consumer spending or deteriorating corporate profits. 🔳 AI Infrastructure Investment Has Reached Unprecedented Scale AI-related infrastructure investment has reportedly reached a scale roughly twice that of historical railway investments and three times that of power sector investments. While profits are concentrated among a few beneficiaries, this massive capital outlay is intensifying demand for funding and inflationary pressures. 🔳 AI Bubble May Burst in 2027 Emin warns that AI companies are nearing their fundraising limits. While investment in 2026 is estimated at ~$700 billion, it could reach ~$1 trillion in 2027 and ~$10 trillion by 2032—but securing such funding will be extremely difficult. He cautions that the AI bubble may already be in the process of bursting. 🔳 Battle for Capital Between Big Tech and the U.S. Government Analysis suggests that competition for capital between major tech firms and the U.S. government is exerting upward pressure on long-term interest rates. Assuming U.S. government debt stands at ~$40 trillion with an average interest rate of 5%, annual interest payments would reach ~$2 trillion. To safeguard fiscal stability, the government is likely to prioritize treasury market stability over supporting the AI industry. 🔳 U.S. Midterm Elections Could Trigger the AI Bubble Burst Emin predicts that if the Democratic Party gains control of both chambers in the midterm elections and implements stricter AI regulations, it could ignite the AI bubble’s collapse. Enhanced regulation of big tech firms could lead to declines in AI-related stocks and lower long-term interest rates. 🔳 AI Investment Faces Financial and Physical Constraints AI development requires not only massive capital but also critical infrastructure—electricity, semiconductors, data centers, etc. Emin notes that investment competition is nearing its limits, warning that by 2027, data centers may be sold off en masse and vast quantities of GPUs could flood the used market. He describes a “chicken race” where companies feel unable to stop investing. 🔳 Risk of OpenAI’s Failed IPO Triggering Market Collapse Okuno predicts that OpenAI may not be able to go public in 2027 due to insufficiently established revenue models. If an IPO fails, the funding cycle among AI firms could break down, negatively impacting Japanese companies that have made massive investments in OpenAI. 🔳 Questionable Cyclicality and Quality of AI Company Profits It has been suggested that cyclicality in investments and transactions among AI firms may be artificially propping up earnings and stock prices. Additionally, adjusted profits excluding stock-based compensation and restructuring costs may present an overly optimistic picture of corporate profitability. 🔳 AI Adoption and AI Stock Price Gains Are Separate Issues Okuno forecasts that AI will continue to penetrate daily life and business operations—technological adoption will persist. However, he acknowledges that AI-related stocks could decline due to cyclicality, regulatory tightening, and unresolved profitability concerns. Growth in AI technology must be distinguished from the sustainability of a stock market bubble. 🔳 U.S. Long-Term Interest Rates May Not Stabilize at 5% All three panelists are skeptical that U.S. long-term rates will remain permanently in the 5% range. Given the heavy fiscal burden, government and central bank intervention to suppress rates is likely in the future. Long-term projections suggest rates could fall toward 3% or stabilize within a 3–5% range. 🔳 Inflation Could Reduce Real Government Debt Burden If the U.S. government manages to keep long-term rates around 3% while inflation remains near 6%, the real burden of government debt would effectively shrink. The panel also raised the possibility of future adoption of yield curve control (YCC) or similar measures to cap interest rates. 🔳 Structural Inflation May Persist Long-Term The global economy is shifting from a low-cost structure driven by free trade toward a more friction-heavy model shaped by war and geopolitical conflict. AI investment and fiscal spending are further fueling inflation, suggesting price increases could continue for the next two decades or more. 🔳 Increased Asset Taxation Could Trigger Stock Market Decline Rising asset prices have widened the wealth gap between the rich and ordinary citizens, prompting discussion about shifting tax focus from income to assets. Stronger asset taxation could pressure stock prices; in Japan, there is also concern that middle-class investors may bear an expanded tax burden. 🔳 Views on the Bank of Japan Reaching a 2% Policy RateOkuno and others predict that the Bank of Japan may raise its policy rate to 2% by the end of 2027 to curb yen depreciation and inflation. Meanwhile, Emin noted that economic deterioration caused by an AI bubble burst could occur before further rate hikes, potentially rendering additional increases unnecessary. 🔳 Japanese rate hikes may coincide with a global stock market correction Emin highlighted that past Japanese rate-hiking cycles have often overlapped with turning points in global financial markets. He analyzed that as the Bank of Japan moves toward more aggressive rate hikes, the global economic cycle may be entering its late stage, increasing the likelihood of unwinding yen carry trades and a stock market correction. 🔳 Japanese equities may continue rising through 2027 Japanese equities could see the Nikkei Average climbing to the upper 60,000–70,000 yen range by 2027. However, some analysts caution that the pace of price gains has accelerated by approximately three years compared to expectations, warranting vigilance regarding short-term overheating and correction risks. 🔳 Japanese blue-chip companies still hold long-term growth potential Despite potential short-term risks such as an AI bubble burst or market corrections, a bullish long-term outlook for Japan’s leading companies remains. Some forecasts suggest stock prices could double over the next decade, underscoring the importance of distinguishing between short-term market volatility and long-term corporate value. 🔳 Increasing cash holdings may become a viable strategy The end of the AI bubble and rising government debt-driven inflationary pressures are key considerations for future market planning. While gradually increasing cash allocations is proposed as a precaution against equity market corrections, it is also essential to recognize the risk that inflation will erode cash’s purchasing power over the long term.