Political Party Using
The $745 Billion AI Bet With No Clear Business Model
NYU professor Aswath Damodaran — whose valuation frameworks are used in business schools on every continent and who is sometimes called the Dean of Valuation — published analysis this week warning that Microsoft, Amazon, Meta, and Alphabet combined could spend $745 billion on artificial intelligence this year without a defined path to returns. That is not a marginal concern from a peripheral skeptic. Damodaran has spent decades valuing companies across sectors, and when he says he cannot find the business model, the warning carries institutional weight.
Bank of America is flagging AI valuations as approaching dot-com era extremes. Their specific data point is striking: all six Magnificent Seven stocks that reported earnings last week saw price swings exceeding what options markets had priced in — and this was apparently the first time that has occurred across all six in the same week during the ChatGPT era. The options market is conventionally regarded as sophisticated on volatility expectations. When reality consistently exceeds those expectations, either the market is structurally mispriced or something about AI earnings is fundamentally harder to model than previously assumed.
Nvidia is not waiting for that debate to resolve. The chipmaker committed up to $3 billion to Lancium and joined a $2 billion capital raise for Firmus this week, deepening its stake in physical AI infrastructure. Whether or not AI software business models ultimately pencil out, the infrastructure buildout generates real spending that flows through Nvidia's order books. The company appears to be constructing a vertically integrated position — selling chips, helping build the facilities that house them, and holding equity in the companies that own those facilities.
A stark data point frames the gap between ambition and execution: only twenty percent of planned U.S. AI data centers are actually under construction. Some of that gap reflects genuine bottlenecks in permitting and grid connection queues. But some of it also depends on revenue projections that have not yet materialized. Amazon is reportedly building a $2 billion data center in Gilroy, California, without residents' knowledge — the secrecy is the story, but the underlying fact is that the buildout continues at a pace that outstrips public awareness.
HR and finance software company Rippling reportedly burned through millions in unchecked AI token costs before launching what it is now calling an AI Spend Console — a dashboard for enterprises to track and control AI spending. The fact that a sophisticated technology company with experienced engineers and finance systems ran up millions in unintended AI costs is a micro-illustration of what Damodaran is describing at the macro level. The companies now selling cost-management tools for AI spending are themselves a new industry created by the inefficiency of the AI industry — a feedback loop worth monitoring.
Combustible Politics: A Raided Congresswoman, a VP's Rebuke, and 100 Scenarios for January 3rd
Representative Ilhan Omar announced that a federal raid on her Washington, D.C., home has forced her to relocate — she can no longer live there. The congresswoman did not specify the full scope of what was taken or what the investigation concerned, but the optics of a sitting member of Congress being displaced from her residence by federal law enforcement carried immediate political weight. Omar's allies moved quickly to frame the action as political targeting; executing a search warrant on a congressional home is not routine, requiring navigation of the Speech or Debate Clause and typically demanding sign-off at senior levels of the Justice Department.
That episode connected to a broader Democratic preoccupation with procedural resilience. Politico reported that House Democrats have mapped out more than one hundred scenarios for January 3rd — the day new members are sworn in — covering what might happen if Republicans attempted to refuse to seat certified winners. Legal scholars quoted in the piece called a broad refusal 'remote,' but the sheer scale of the contingency planning, described as systematic and almost algorithmic, reflected institutional memory from January 6th and a conviction within the caucus that procedural vulnerabilities in the transition of power are real enough to warrant preparation.
Vice President Vance added his own intra-party friction by publicly telling Republicans to 'stop whining' about a Vivek Ramaswamy ad. The rebuke — essentially calling his own party soft — was consistent with Vance's public persona but represented messaging that analysts noted could complicate voter turnout in competitive districts six weeks before November.
A potentially significant national security thread also surfaced: reports indicated that current and former Pentagon officials were prepared to speak to congressional Democrats about Defense Secretary Hegseth if Democrats won the House in November. The Telegraph's reporting included officials using the word 'impeachment' — not casual language, and language that implied multiple individuals willing to go on record under oath about what they had witnessed inside the Defense Department.