Stiglitz warns AI bubble could burst, urges India to protect its services sector | Today’s news
New Delhi: The artificial intelligence (AI) boom resembles a bubble and its continued rise could spell trouble for India. service sectorAmerican economist and Nobel laureate Joseph Stiglitz warned on Saturday.
“I hate to say it, but I think you (India) should be worried. If you look where. AI has it affected the US workforce, what is it good at? It is good in the text. He is good at code. AI is really good at replacing coders, programmers. And those are the jobs that are replacing it,” Stiglitz said at the Hindustan Times Leadership Summit 2026 in the national capital.
“And so the service export miracle in India has really been based on these particular kinds of jobs. So the question is, how do you navigate? Where do you go?”
An economic model is missing
Stiglitz believes that AI lacks a viable macroeconomic model. While technology alone could succeed, companies that have poured massive investments into AI won’t be able to generate the expected returns, he said.
“And it’s actually an open question not just in India, but in the United States, in all countries. The difference is that in the United States, we could basically tax the winners of the AI revolution—the AI companies—and use some of that to support what I would call a progressive AI agenda, where you invest in people and society and make it sustainable,” he said.
However, such redistribution will not work across borders, he said.
The Nobel laureate got straight to the numbers: 30 to 32% of recent growth in the US comes from data centers alone – a pace he called unsustainable.
“I think the AI bubble is a bubble,” Stiglitz said. “You can’t tell a bubble until it bursts. But you can be pretty sure.”
Companies have promised returns they can’t deliver and rely on monopoly power they’ll never deliver, he said. Competition is already eroding those gains, with some open-source models driving down costs and U.S. frontier firms training themselves on cheap Chinese models, he noted. Technology will survive, he insisted, even if companies will not.
