At the risk of confirming my stupidity, (as I know nothing about such matters) this is what I see as the problem with the current high valuations.

As we move from large language models (answering questions) to AI models with agency (doing things), we must surely run into a big problem. Angentic AI is already here and we are being to see how it is eliminating jobs in a major way. There is so much human inefficiency in the work place, it will incredibly easy to eliminate a large percentage of jobs.

If there are less people working, there will be less income taxes paid. Governments, who are already dealing with structural deficits (or not dealing with them!), must then provide yet more people with an income (universal income).

This means the small group of companies and individuals involved in AI make super profits. The concentration of wealth, which is already extreme, becomes more concentrated.

Then you have the problem of the AI making cars, phones etc. but AI can’t buy cars.

So you end up with governments taxing the AI companies very heavily to fund universal income. That causes their stock market valuations to fall. Which has a massive negative wealth effect. The decline in human consumption causes an economic decline as measured by GDP.

You then have a population with no purpose other than leisure activities. Are the robots going to keep them in line?

The only way the large tech companies can hold onto all of the profits, is if they can somehow control what the voters think and make them believe the status quo is good for them. Twitter/X, instagram, YouTube etc is solving that problem for big tech for now. But is that sustainable? Are humans really going to allow machines to take over our work and our democracy?

This takes no real account of how technology is influencing defence, policing, law and order, education, health, the environment, or democracy itself.

We don’t really know where it all lands but from the narrow lens of the market, it seems optimistic to project a winner takes all outcome for corporations continues forever. There must surely be major adjustment pains.