Last Tuesday I opened my trading app like I do every morning, expecting the usual slow grind higher. Instead I watched the Nasdaq climb 2%, then completely reverse and close down more than %. In a single day. The reason? One company everyone thought was bulletproof suddenly looked mortal again.
Welcome to the economy in late 2025. Where everything is awesome and terrifying at exactly the same time, and nobody—not the Fed, not Wall Street, not even the billionaires building the future—seems totally sure which one it’s going to be tomorrow.
The One Question Keeping Everyone Up at Night
Are we living through the greatest technological productivity boom in human history… or the most expensive mistake since the dot-com bubble?
Honestly? I think the answer is yes to both. And that uncomfortable truth is exactly why the markets feel like they’re on a permanent sugar high mixed with Red Bull and a little bit of panic.
The Numbers Are Actually Insane
Let me throw some numbers at you that still don’t feel real, even after watching them happen in real time.
- One chip company—just one—reported almost $32 billion in profit for a single quarter.
- That same company briefly became worth more than the entire economy of Germany.
- Data center electricity demand is now growing faster than it did at any point during the internet build-out.
- Companies are spending hundreds of billions building AI infrastructure that… well… mostly generates pictures of cats and writes slightly better emails right now.
I’ve been watching markets for almost two decades, and I’ve never seen anything that simultaneously looks this promising and this precarious.
Why This Feels Different From Past Tech Bubbles
Here’s where it gets interesting. Every past technology wave—railroads, automobiles, personal computers, internet—followed the same pattern:
- Massive hype and investment
- Hundreds of companies rush in
- 90% of them die spectacularly
- The survivors reshape civilization
The difference this time? The survivors might literally reshape civilization in ways we’re not emotionally prepared for.
When the automobile came along, it put buggy whip manufacturers out of business. When the internet arrived, it killed Blockbuster. But AI? It’s coming for lawyers, doctors, programmers, artists, truck drivers, teachers… pretty much anyone whose job involves thinking or creating.
That’s not hyperbole. That’s what the companies building this stuff are openly promising.
The economic potential of AI is almost limitless… but so is the disruption.
— Leading tech CEO, 2025
The Productivity Paradox Nobody Wants to Talk About
Here’s the dirty secret that keeps me up at night: We’ve been spending hundreds of billions on AI for years now, and official productivity numbers… haven’t really moved.
Think about that. We’re in the biggest technology investment boom since the 1990s internet build-out, and the government statistics that measure how much stuff we produce per hour worked are basically flat.
This is what economists call the productivity paradox, and it’s happened before. It took decades for electricity to show up in productivity statistics because companies had to completely reinvent how they worked to take advantage of it.
The question is whether AI is going to be electricity… or whether it’s going to be the Segway of the 2020s. Something that seemed revolutionary but mostly just made rich people slightly richer.
What Happens to Regular People in All This?
While Wall Street argues about whether we’re in a bubble, actual humans are living with the consequences right now.
My friend who works in marketing just watched his entire team get cut by 40% because “AI can do 80% of what we do now.” His company stock is up 60% this year. He’s looking at apartments in his parents’ basement.
That’s the economy we’re living in. Where companies can be more profitable than ever while their former employees can’t afford rent.
And it’s not just white-collar jobs. Truck drivers, warehouse workers, customer service reps—entire professions that employed millions are in the crosshairs.
The cruel irony? Many of these same companies are making record profits because labor costs are becoming optional.
The Political Dimension Nobody Wants to Touch
The new administration came in promising to fix the economy for working people. But here’s the problem: The economy is doing great by almost every traditional measure—record stock market, low unemployment, strong GDP growth.
Except people feel terrible about it.
Because the gains are going to a tiny handful of companies and investors, while everyone else watches their 401(k) swing 5% in a day and wonders if their job will exist in 2027.
This is the fundamental political challenge of our moment: How do you run on “the economy is great” when most voters feel like they’re barely hanging on?
So What Happens Next?
Here’s my best guess, based on three possible paths:
| Scenario | Probability | What It Means |
| Soft Landing + AI Boom | 35% | Productivity finally shows up, wages rise, everyone wins |
| Hard Landing + Recession | 30% | AI spending bubble pops, markets crash 40%+, unemployment spikes |
| Muddle Through | 35% | Volatile markets, slow growth, constant anxiety—basically now forever |
My money is honestly on door number three. We’ve become addicted to volatility. The market needs its daily dose of drama, and AI is providing it in spades.
In my experience, the truth usually lies in the messy middle. We’ll probably get some incredible breakthroughs mixed with some spectacular busts, massive wealth creation alongside real hardship, and constant whiplash that makes everyone feel a little crazy.
The one thing I’m certain of? Whatever happens, it’s going to be a hell of a ride.
The economy isn’t broken. It’s transforming. And transformations are always messy, painful, and unpredictable.
Buckle up.
