Recent discussions about potential economic downturns highlight the yield curve's behavior, which, despite showing concerning patterns, does not indicate immediate recession fears. The Sahm Rule, a method for assessing economic health based on unemployment spikes, has not been activated yet, even as employment figures have shown slight deterioration.
Jason Furman, a Harvard economist and former chairman of the White House Council of Economic Advisers under Barack Obama, expressed significant concerns in a recent Bloomberg Q&A article, citing 14 instances of worry regarding the potential AI bubble. This marked a stark contrast to a previous interview in October, where he mentioned only one worry. He stated that financial valuation issues pose a greater risk than technological concerns.
Furman explained that justifying high financial valuations requires both effective technology and profitability. He warned of potential diminishing returns and questioned whether established scaling laws would hold in the future. His remarks touch on the broader implications of AI advancements, particularly following OpenAI's release of the GPT-5 model in August, which users felt did not meet expectations for significant improvement.