It's just hard to tell the difference between "real" demand and "circular." That's the concern.

PG had an essay about this during the dotcom, when he worked at yahoo. Iirc...Yahoo's share price and other big successes in the space attracted investment into startups. Startups used that money to advertise on yahoo. Yahoo bought some of these the startups.

So... a lot of the revenue used to analyze companies for investment was actually a 2nd order side effect of these investments.

Here the risk is that we have Ai investments servicing Ai investments for other Ai investments.

Google buys Nvidia chips to sell anthropic compute. Anthropic sells coding assist to Ai companies (including Google and Nvidia). They buy anthropic services with investor money that is flowing because of all this hype.

Imo the general risk factor is trying to get ahead of actual worldly use.

The Ai optimists have a sense that Ai produces things that are valuable (like software) at massive scale...that is output.

But... even if true, it will take a lot of time, and lot of software for the Econony to discover this, go through the path dependencies and actually produce value.

The most valuable, known software has already afy been written. The stuff that you could do, but haven't yet is stuff that hasn't made the cut. Value isn't linear.