AI Firms Raise $300B as Market Faces Absorption Test

WHO:

The Information - AI companies sold or priced shares; Anthropic is excluded from the article’s tally.

The Information - Alex Eichenstein is the author of the article.

Substack - Paul Krugman wrote “After the Bubble Bursts.”

Substack - Investors and lenders have backed AI companies, while hyperscalers have invested heavily in AI-related capital expenditures, particularly data centers.

WHAT:

The Information - Excluding Anthropic’s IPO, AI companies sold or priced more than $300 billion of stock, with about $100 billion more on tap.

The Information - Volatile trading in AI-related stocks drew attention to investor appetite for additional share offerings and the market’s ability to absorb them.

Substack - Krugman describes AI as a remarkable technology that may produce substantial economic payoffs, but says those payoffs are not yet clear in the data.

Substack - Krugman says it is doubtful whether companies making enormous AI investments can capture enough of the eventual payoffs to offset their spending.

Substack - Krugman says prices of hyperscaler stocks have fallen 27 percent from their peak and the cost of insurance against default on AI-company bonds has soared.

Substack - Krugman says a burst AI bubble would almost surely cause a recession; its depth is highly uncertain, and he favors the view that it would be worse than the slump at the end of the 1990s technology boom.

Substack - Krugman says recovery could be painfully slow, with elevated unemployment lasting multiple years, even if the recession is short and shallow.

Substack - Krugman cites the bursting of the dot-com bubble and the housing bubble as past examples of sudden bubble reckonings.

WHY:

The Information - The stock offerings raise questions about how much additional equity the market can absorb.

Substack - Krugman’s discussion considers the economic consequences if AI investment proves unsustainable and the bubble bursts.

HOW:

Substack - Krugman says the consequences of a possible AI bust can be assessed using historical evidence about the macroeconomic aftermath of past bubbles.

Substack - The article says it will examine modern recessions, slow recovery after bubbles, comparison with the dot-com recession, and the likely inadequacy of the policy response.

(UPDATED November 9, 2026 02:06 UTC)

AI companies have sold or priced over $300 billion in stock, with more offerings looming. Economist Paul Krugman warns massive AI investments may not deliver clear economic returns. He says a bursting bubble could trigger recession and years of elevated unemployment.