Robert Rubin warns AI investment boom poses financial and social risks

Former US Treasury Secretary Robert Rubin has a message for the artificial intelligence trade: the upside is real, but so are the risks the market may be ignoring. On October 7, 2026, Rubin warned that the AI investment boom could create financial and social risks for both the economy and markets. His argument is that current valuations may not fully price in the uncertainty that comes with spending this much money, this fast, on a technology still proving its returns. The circularity problem Rubin acknowledged that the wave of investment could deliver substantial productivity gains. His concern is that those potential gains sit alongside significant financial and social uncertainties that market prices are not adequately capturing. The centerpiece of his warning is something he called circularity risk. It refers to the tangled web of commitments between AI suppliers, such as chipmakers, and the parties connected to them, including customers, software firms and investors. The risk is that demand in the AI ecosystem may be partly self-reinforcing. Suppliers, buyers and backers are linked through overlapping commitments, so if expected returns fail to show up, those interlocking rela...