分类： business

Against a backdrop of simmering geopolitical tension in the Middle East, persistent inflationary pressures, and growing anxiety over soaring national debt levels, one might expect US financial markets to be facing sharp volatility or a downward correction. But instead, Wall Street has continued to smash through record after record in recent trading sessions – and nearly all of that momentum traces back to one dominant trend: the explosive global excitement around artificial intelligence.

As geopolitical flashpoints like the ongoing conflict around Iran have stoked broader uncertainty across global commodity and security markets, and economists continue to sound the alarm over stubborn inflation and unsustainable debt burdens, the disconnect between underlying macroeconomic risks and the red-hot rally in AI-linked equities has sparked a fierce debate among investors and analysts. The core question on nearly every market observer’s mind is this: Has the hype around AI grown into a dangerous asset bubble that is primed to burst?

BBC business correspondent Samira Hussain has delved into this market disconnect, unpacking the competing forces that have driven AI stocks to astronomical valuations even as major systemic risks linger on the horizon. For proponents of the AI boom, the technology represents a transformative paradigm shift that will reshape entire industries, drive productivity gains for decades to come, and justify the current elevated valuations of leading AI developers and chip manufacturers. But for skeptics, the breakneck speed of the rally has echoes of past market manias – from the dot-com bubble of the 1990s to more recent speculative frenzies – where unchecked hype outpaced actual tangible profits and sustainable business models, ultimately leading to a painful crash.

This ongoing debate leaves investors facing a high-stakes dilemma: whether to buy into the AI boom and chase further gains, or step back to avoid the risk of a catastrophic bubble burst that could erase trillions in market value. As the rally continues to push markets to new heights, the question of how long this disconnect can last looms over every corner of global finance.

For more than a decade, economist and commentator Noah Smith stood firmly among the growing cohort of analysts convinced that rising corporate market power was inflicting widespread damage on the U.S. economy. Throughout the 2010s, a mounting body of circumstantial economic research supported this narrative, linking industrial concentration to a host of the country’s most persistent negative economic trends. In a 2017 analysis, Smith broke down the accumulating evidence like a detective building a case: rising national market concentration, expanding corporate price markups, growing industry profits, falling business investment, suppressed wages in concentrated labor markets, higher prices following mergers, weakened antitrust enforcement, and weakened overall output. While some points remained unconfirmed, the weight of evidence was compelling enough that Smith, writing at Bloomberg, repeatedly backed the argument that concentrated market power made the U.S. economy less efficient and more unequal, and that stronger antitrust enforcement was a worthy policy solution. He did, however, caution that antitrust was not a guaranteed fix, and argued that Big Tech was not an appropriate target for aggressive antitrust action. When Joe Biden won the presidency in 2020, Smith was optimistic that these academic ideas would finally translate to real policy change, particularly with appointments like Lina Khan signaling that the Democratic Party was ready to prioritize antitrust reform. For years, leading economists had built the intellectual case for aggressive antimonopoly action through books, research reports, and public warnings, culminating in the Biden administration’s historic shift toward stricter antitrust enforcement. While Smith criticized some of the Biden’s administration high-profile Big Tech antitrust actions — noting the government lost most of its cases and that the campaign against Meta was misaligned with actual market harms — he celebrated the incremental wins that antitrust regulators secured in mundane, concentrated sectors ranging from meat processing to pharmaceutical manufacturing. These wins were not enough to reverse decades of growing consolidation, but Smith held out hope they would create a chilling effect that slowed the march toward industry dominance by megacorporations. In recent years, however, Smith has developed increasingly serious doubts about the modern antimonopoly movement, even as his concern over unaccountable corporate power has grown amid the rise of AI and the corruption of the Trump era. What has turned him away from the movement is its growing tendency toward ideological monomania and the harmful policy outcomes that this obsession produces, he argues. Quoting a famous quip from economist Robert Solow, Smith notes that just as everything reminds Solow of sex, everything reminds today’s antimonopoly activists of corporate concentration. A 2024 deep dive by journalist Jonathan Chait into the movement’s origins, focused on founder Barry C. Lynn, laid bare this all-consuming ideological bent. Lynn frames monopoly power not as one of many pressing economic problems, but as the singular root cause of nearly every ill facing modern America, from rising wealth inequality to the growth of the radical right, to racism and homophobia, to the collapse of local news media. Antitrust, in Lynn’s framework, is not merely a regulatory tool but an all-encompassing ideology for reshaping all of American society. This totalizing theory is deeply flawed, Smith argues, with most of the links between concentration and social ills resting on flimsy, unproven assumptions. For example, to blame corporate concentration for a recent rise in racism requires accepting three unproven claims: that racism has actually increased in recent decades, that any increase is driven primarily by economic factors, and that those economic factors stem directly from corporate consolidation. Even on core economic questions, the evidence contradicts the antimonopoly narrative: multiple credible research teams have found that employer concentration in local U.S. labor markets has actually declined over recent decades, undermining the claim that monopsony power is the root cause of slow wage growth. During the post-pandemic inflation of 2021-2022, leading antimonopoly activists like Elizabeth Warren blamed “greedflation” — corporate price-gouging enabled by market power — for rising prices, but multiple rigorous studies have found that markups remained stable during the inflation surge, and that more concentrated industries actually passed less of their cost increases onto consumers. Even moderate antitrust experts acknowledge that the movement has strayed into overreach, with one former antitrust industry leader noting that neo-Brandeisian antimonopolists have turned antitrust from a law enforcement tool into a catch-all solution for every economic, political, and social problem facing the country. Yet this moderate perspective has been sidelined by the movement’s ideological leadership, whose obsession with concentration has led to misdirected policy actions that harm workers and consumers rather than helping them. For example, activists have targeted low-margin industries like grocery stores, health insurance, and airlines, even though these sectors consistently post profit margins below the national corporate average. During the post-pandemic inflation, Warren blamed high food prices on grocery chain market power, even though grocery margins actually fell as inflation accelerated, and the Biden administration’s blockage of the Kroger-Albertsons merger rested on the same flawed logic. Most notably, the Biden antitrust blockage of the Spirit-JetBlue merger led directly to Spirit going out of business entirely, putting 17,000 workers out of a job and ultimately increasing industry concentration anyway. On housing, the movement has pushed the popular narrative that corporate landlord buying of single-family homes is the primary cause of high rents, even though corporate ownership of rental housing remains a tiny share of the overall market, and multiple studies find corporate landlords actually charge lower rents on average than small independent landlords. The real driver of high rents is supply constraints, and the antimonopoly focus on corporate ownership distracts from policy solutions that would actually bring prices down. Beyond flawed policy targeting, the modern antimonopoly movement rejects core empirical principles of economic research, Smith argues. Movement leaders including Lynn and Lina Khan have openly denied the existence of market forces, claiming all prices are determined entirely by political power. This claim is empirically indefensible: basic observations from declining demand when prices rise to increasing fish prices after bad weather confirm that market forces shape outcomes across the economy. Even on the core claim that U.S. market power has increased steadily over recent decades, the empirical evidence remains far from settled. While researchers like De Loecker and Eeckhout found large increases in aggregate price markups, many other economists dispute this finding, pointing to widespread measurement challenges: ambiguous market boundaries, shifting product definitions, inconsistent geographic market definitions, difficulty allocating fixed costs across multi-product companies, and problems measuring risk-adjusted profits that produce wildly different results depending on the underlying assumptions researchers choose. The problem is that antimonopoly crusaders refuse to accept this uncertainty, and instead dismiss anyone who questions their claims as a paid corporate shill, closing off open debate and cementing ideological orthodoxy. This factional intolerance was on full display when the movement attacked Ezra Klein and Derek Thompson’s book *Abundance*, which argues for removing regulatory barriers to increase the supply of housing, energy, and other key goods. Instead of embracing the shared goal of expanding affordable abundance, movement leaders immediately attacked Klein and Thompson as corrupt corporate allies, simply because they were not part of the antimonopoly faction. This behavior, Smith argues, reveals that the movement prioritizes building factional power within the Democratic Party over advancing good policy. Any thinker or analyst who is not part of the clique is treated as an enemy, regardless of the content of their ideas. History is full of similar pseudo-cult intellectual movements that have captured political parties: on the Republican side, 1980s supply-side economics and modern national conservatism fit this pattern, while on the Democratic side, Modern Monetary Theory (MMT) rose and fell as a similar totalizing ideology. Unlike MMT, however, the antimonopoly movement has succeeded in capturing substantial power and prestige within the modern progressive movement, with backing from leading elected officials and major progressive media platforms. While Smith reaffirms that corporate power remains a real and pressing problem in the U.S. — particularly with the rise of large AI companies that threaten to amass unprecedented market and political influence — he argues the movement’s current monomania, epistemic closure, rejection of empiricism, and factionalism make it unfit to address this challenge. Meaningful reform to curb corporate power will require a more pragmatic, evidence-based approach that rejects the idea that breaking up monopolies is the solution to every problem, Smith concludes.

Next month will mark a watershed moment for private space exploration: Elon Musk’s Texas-based SpaceX will open its doors to public investors when it lists on the Nasdaq stock exchange via one of the most highly anticipated initial public offerings in Wall Street history.

Set to be the largest public share sale ever conducted, the June 12 IPO is projected to raise at least $75 billion in fresh capital and catapult SpaceX straight into the ranks of the 10 largest publicly traded companies in the United States. For casual and institutional investors alike, the offering presents a high-stakes opportunity to buy into a company redefining space technology — but it also carries extraordinary uncertainty tied to its founder’s outsize, long-term ambitions.

Until now, SpaceX has remained privately held, counting Musk and a small group of private backers as its sole owners. When trading opens, more than 550 million new shares will be available to investors at an offering price of $135 per share, valuing the company at roughly $1.75 trillion. That valuation places SpaceX above leading AI startups Anthropic and OpenAI, but below the sector’s biggest incumbents including Apple, Microsoft, Alphabet and Amazon.

While individual investors based in the UK and elsewhere will be able to purchase shares via regulated investment platforms and brokers, even indirect investors may have exposure: many pension funds, savings accounts and index-tracking funds automatically add shares of the largest listed companies to their portfolios, meaning everyday savers could see an impact from SpaceX’s performance regardless of whether they buy shares directly.

SpaceX’s business lines already extend far beyond its original core of rocket launches and space exploration. The company currently operates the Starlink satellite internet network, holds a stake in Musk’s social media platform X, and developed the AI chatbot Grok. It is legally separate from Musk’s better-known electric vehicle venture Tesla, though industry speculation suggests a potential merger between the two firms could come as early as 2026.

Musk has outlined that fresh capital from the IPO will go toward expanding existing operations while funding a slate of far-reaching, sci-fi-inspired long-term projects: asteroid mining, establishing a permanent human colony on Mars, and building AI data centers in orbit. In the company’s offering prospectus, Musk frames these projects as a existential necessity, arguing that humanity must move beyond Earth to avoid “the same fate as dinosaurs” and build a multiplanetary “age of abundance” to preserve the “light of consciousness.”

Not surprisingly, these sweeping ambitions have drawn heavy skepticism from market analysts. Critics point out that SpaceX posted $18.6 billion in revenue in 2024, but recorded a net loss of $4.9 billion over the same period. The company’s own IPO prospectus explicitly acknowledges its “history of net losses” and warns that it “may not achieve profitability in the future.”

The global AI race, a core focus of SpaceX’s future plans, is already notoriously capital-intensive and marked by unpredictable market shifts, leading to widespread concern that the company’s $1.75 trillion valuation is inflated, creating a bubble that could burst once public trading begins. Even veteran Wall Street analysts admit there is no reliable way to forecast whether share prices will rise or fall after listing, as the valuation depends almost entirely on the success of unproven long-term projects.

Opinions among industry experts are deeply divided. Ruth Foxe-Blader, a partner at U.S. venture capital firm Citrine Venture Partners, notes that SpaceX’s diverse portfolio of ongoing and planned projects gives it multiple pathways to growth, creating strong selling points for potential investors. But Michael Hewson, a market analyst at iForez, argues that the company’s valuation “defies belief” and that buying SpaceX shares amounts to a pure bet on Musk’s ability to deliver on his most extreme promises.

This IPO is the first of three massive AI-related public listings expected in 2025, with Anthropic and OpenAI set to follow with their own offerings. All three mega-listings share a common trait: they are attracting billions in investor capital despite no guarantee of sustained future profits.

One critical note for potential investors: even after the public share sale, Musk will retain more than 80% of the company’s voting power, only a tiny drop from his current control. That means he will retain full authority over all major company decisions, including leadership appointments and long-term strategic direction. The arrangement has drawn criticism in light of Musk’s well-documented erratic management style and competing responsibilities across his multiple business ventures. Yet industry observers note that Musk’s reputation as a innovator who has repeatedly defied early skeptics is, paradoxically, one of the biggest drivers of investor interest in the offering.

For early backers, the IPO could reshape Musk’s net worth: if the offering performs as expected, he will become the world’s first trillionaire. For investors, the choice boils down to a simple question: is Musk’s vision of a multiplanetary future a solid investment, or a high-risk gamble that may never pay off?