OpenAI has given ChatGPT a significant place in the collective conscience for the past three years, and is now planning to go public on the stock market at a valuation of $500 billion. This past year, other companies like Google, Apple, Microsoft and countless other small producers have launched or incorporated competitor modules that have truly blown up the market. This past summer, even more has changed. Social boundaries are being challenged. The economy has become deeply saturated with the new technology. The anticipation stage is over; the reactionary stage has begun.
“I definitely think that there is some irrational exuberance,” social studies department chair and economics teacher Michael Roethler said. “There’s always a shakeout with disruptive technology. In the 1920’s, there were hundreds of car companies. Well, that shakes out to the big three. In the 1990’s, there were tons of new dot-com companies, and that shook out to where a lot of them didn’t make it and a few of them did. So, I think we’re still in that shakeout period with AI.”
Now, major companies are beginning to scale back their investments into artificial intelligence. MIT released a study in July that found that despite over $30 billion placed into generative AI in the first half of 2025, 95% of companies got zero return on their investment into the technology. Meta announced August 19 that it plans to downsize its AI division, ‘Meta Superintelligence Labs.’ This is the fourth time that Meta has restructured the division in the past six months, and the first of which to shrink it.
“There’s an awful lot of high valuations of some companies that have trillion-dollar market caps. That doesn’t seem to make sense,” Roethler said. “I think they go hand-in-hand, right? There’s going to be shaking out of companies, and Nvidia or others have a market cap of a few trillion dollars; that’s a bigger GDP than most countries. Does that really make sense that they’re going to be able to make trillions of dollars in profits from chips and AI stuff? That, I don’t know.”
However, a market implosion is not yet probable. Another paper from MIT, “The Simple Macroeconomics of AI” written by Daron Acemoglu in May 2024, reports that contemporary AI technologies are able to profitably replace one in every twenty jobs in the United States labor market. Acemoglu reports a “nontrivial, but modest” increase to the global GDP of roughly $1 billion, while other sources such as banking firm Goldman Sachs expect this to be up to $7 billion.
“To the extent that a technology improves productivity, I don’t think there’s such a thing as too much,” economics teacher Thomas Saam said. “This is a story that goes back hundreds of years. During the Industrial Revolution, [there was] a group called the Luddites. They were fearful of machines that would make clothing because it would take their jobs. While we’re sensitive to people’s concerns about the labor market, adopting technology increases productivity and makes people better off.”
While OpenAI experienced $3.7 billion in revenue in 2024, it also lost an estimated $5 billion in that time frame. However, their current estimation to sell $6 billion in shares when they hit the stock market is not quite erratic behavior. The company is estimated to nearly quadruple its income to $12.7 billion at the end of 2025.
“By today’s valuation measures, a company losing money is not attractive. But, if there’s growth in profits forecast in the future, then it is valuable. And if a company like Open AI is expected to grow its earnings 40% per year, then it’s going to objectively deserve a higher multiple.” Saam said. “You really can’t say whether AI is a quote-un-quote ‘bubble’ or not right now.”
Not every company benefiting from newer AI technologies are big-name technology firms. Americans are now familiar with the distinct landscape of emotional chatbots offering synthetic connection, such as Character.AI, a platform with over 25 million active users that hit over $32 million in revenue during the 2024 fiscal year. A similar company, Chai AI, has accrued $40 million in revenue in the past fiscal year despite only 12 employees on staff.
“Sometimes, these chatbots are just giving you what you want to hear,” sociology teacher Brennan Lazaretto said. “So, if you’re in a relationship with an AI chatbot, and you’re trying to engage with them within a conversation, if you’re engaging with them in a way that in normal society would be deemed as disrespectful and breaking norms, however it might be, I don’t know to what extent a chatbot would respond. I don’t know if it would try to correct the behavior of the user or indulge that user into using that language or that behavior more.”
After incidents like the death of 76-year-old man Bue Wongbandue, who died in March in a Queens parking lot while looking for the “address” of a chatbot that claimed it was a real person, many are demanding more stringent regulation be placed upon the producers of these large language models. However, legislators don’t seem to be following. The One Big Beautiful Bill Act almost passed with a clause banning any legal regulation of AI until 2035, which was removed only three days before it was passed July 4, 2025.
“Laws can really never keep up with how fast technology is changing. The exponential growth of technology can’t be kept up with. The people in Congress that are writing these laws, they’re a law for today; it won’t pass in time for that to be relevant anymore. The technology’s already changed,” Lazaretto said.
More recent legislation, like the United Kingdom’s Online Safety Act of 2023, has pushed companies such as Youtube to use AI to comply in a fast and cost-effective manner.
“I definitely think it’s a technology that will be here to stay. The bigger question is, who’s going to be the players that stick around with it? That’s the unknown piece that we’re in,” Roethler said.
