The AI boom isn't going anywhere

Major tech companies like Meta, Microsoft, and Google are significantly increasing their AI spending forecasts. This massive investment is driven by strong demand for AI infrastructure and talent, potentially offsetting other economic challenges. These companies reported robust earnings and are optimistic about the business opportunities presented by AI. However, concerns exist that some demand may be fueled by unsustainable spending or circular financing. Federal Reserve Chair Jerome Powell doesn't believe lower interest rates would fuel an AI bubble, as spending is based on long-term productivity assessments. The AI boom is acting as a significant economic backstop, preventing weaker growth numbers. Companies like Caterpillar are benefiting from increased demand for data center-related equipment. While AI is lifting various industries, it's not yet translating into substantial job growth. Despite investments, the labor market is softening, and data centers don't require extensive staffing once built. The race to develop AI is far from over, with no clear end in sight according to recent earnings reports.