Is the AI bubble about to burst? NYU's Aswath Damodaran, the Dean of Valuation, breaks down the math behind AI spending and what a correction means.

"There is a lesson coming, whether it takes the form of a twenty percent correction, a forty percent correction, that lesson is coming." - Aswath Damodaran

In this episode of Disruptor Confessions, host John Ayers sits down with Aswath Damodaran, Professor of Finance at NYU Stern School of Business, where he has taught since 1986. Damodaran, known as the Dean of Valuation, explains why he agrees AI is a bubble with people over-investing, walks through what roughly $3 trillion of AI spending would have to earn to pay off, and why he says a correction is coming. They also cover how much of AI's revenue is circulating inside the build-out, the risk of data center debt, why he says conviction should never be used with any AI story, and the two outcomes that terrify him: an overnight collapse, or AI succeeding exactly as its optimists claim.

🚀 Key Topics Discussed:

• The AI Bubble: Why Damodaran says people are over-investing, and why he calls bubbles features, not bugs, of markets.

• The $3 Trillion Math: What roughly $3 trillion of AI spending has to earn for an 8% to 10% return, set against about $250 billion of AI revenue last year.

• Intra-Factory Revenue: Why he says almost all AI revenue is circulating inside the build-out, and what cross-investing between big tech and AI labs means.

• The $30 Trillion Question: How he tests AI's market size against what companies spend on employees worldwide.

• Debt and the Correction: Why data centers funded by debt and private credit worry him more than the cash-rich giants.

• Conviction as a Red Flag: Why he says the word conviction should never be used with any AI story, positive or negative.

• The Two Scenarios That Terrify Him: An overnight AI collapse, or AI succeeding as its optimists claim, and what each means for jobs and purpose.

• Disruption's Dark Side: Why he says disruption in a short period is more bad than good, and who the disrupted are.

• The Sleep Test: How he thinks about cash, index funds and your 401(k) in a moment of maximum uncertainty (not investment advice).

👨‍🏫 Featured Guest:

• Aswath Damodaran

• Professor of Finance and Kerschner Family Chair in Finance Education, NYU Stern School of Business

• Author, Investment Valuation, The Little Book of Valuation, Narrative and Numbers

• Website: http://pages.stern.nyu.edu/~adamodar

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