Nvidia's AI Investments Seen as a Catalyst for Sustainable Growth

Prominent economist Tyler Cowen says that Nvidia's massive investments in AI could make the current boom more durable, not prove it is a bubble. Speaking on the Prof G Markets podcast, Cowen likened Nvidia to a 'buyer of last resort' for the sector.

Nvidia has committed billions of dollars across an industry that ultimately buys its chips. This investment strategy could be seen as a way to help new technologies get off the ground, with Cowen arguing that new things often bootstrap themselves. He compared this to the rise of automobiles in the 1920s, where many carmakers failed without making the underlying technology worthless.

Cowen also noted that Microsoft, Alphabet, and Meta can play similar roles as 'buyers of last resort' for AI. He emphasized that investors should focus on whether the product works rather than debating if it's a bubble or not. 'And the answer here is a very clear yes,' he said.