AI-Led Growth and America’s Industrial Fragility

by Nato Balavadze

In this paper, we discuss:

• How AI has become the core engine of U.S. market optimism, driving record highs even as signs of speculative excess accumulate;
• The unprecedented AI buildout—nearly $400 billion a year in capex—despite minimal current revenues, creating a widening gap between investment and demand;
• Circular financing loops between Nvidia, OpenAI, AMD, Oracle, and CoreWeave that inflate valuations and heighten systemic fragility;
• The deep weakness of the real economy, with manufacturing in a near-record slump and consumer sentiment at multi-decade lows;
• The growing risk that an AI correction could erase trillions in global wealth, exposing the divergence between technological euphoria and industrial stagnation.

Download PDF: AI Hype November 2025