Yesterday, Anthropic filed to sell stock on the Nasdaq, potentially the largest initial public offering in history.

• The company behind Claude AI may try to raise a record $100 billion.
• Some insiders think the company could be valued at $2 trillion.

This news punctuated an extraordinary day of AI deal-making. Anthropic’s potential $100 billion ipo, SpaceX borrowing $40 billion to buy new nvidia AI chips, and Meta’s plans to raise up to $95 billion for its own AI projects add up to roughly 1 percent of U.S. gross domestic product.

Building AI is extremely costly. Anthropic may soon be paying SpaceX $3.1 billion a month for computing capacity alone and has committed to spending $750 billion on computing power over the next decade.

• These figures have raised worries that AI spending is a “bubble” and that companies in the industry and connected to it are valued far beyond their actual output and worth.
• In its June annual report, the Bank for International Settlements (bis) said the AI-spending boom, forecast to reach $2.5 trillion worldwide this year, may prove unsustainable and could produce a financial crisis similar to the dotcom bubble bursting in 2000.

AI is clearly a world-changing technology, but many businesses are investing without clear ways to measure its financial benefits. If the real-world financial output of AI doesn’t rise high enough fast enough, the value of these investments will drop sharply, rapidly deflating not only the value of these companies but affecting everything that is connected to them.

• Internet-related stocks reached a $3 trillion valuation by March 2000 before losing 78 percent of their value in 2½ years. Hundreds of Internet companies went public in the late 1990s and were delisted or out of business completely by the end of 2002.
• If history repeats itself with AI, some economists estimate America’s entire gdp could drop 1 to 3 percent.
• The bis is also warning of three other economic risks—inflation, fragile bond markets and soaring government debt—that could make an AI bubble’s burst more painful than the dotcom bust.

The wisest king who ever lived warned against the kind of risk-taking now inflating the AI bubble. In Proverbs 22:26-27, Solomon wrote, “Be not thou one of them that strike hands, or of them that are sureties for debts. If thou hast nothing to pay, why should he take away thy bed from under thee?”

• This verse cautions against foolishly pledging what you cannot afford to lose, such as guaranteeing debts or investing heavily with borrowed money. Learn more about how the world is ignoring this wisdom on an unprecedented scale in our August cover story, “The AI Gamble.”