Readers' letters: We're all in trouble if the AI bubble bursts

Now in 2025 we have market valuations in excess of $17 trillion for the leading US tech titans. Is this sustainable?

AI stock prices in particular have exhibited “bubble”-like characteristics for some time: share prices have rocketed on the back of projected earnings of 30 times over share price.

Valuations have been further inflated as AI companies do deals between themselves and buy product from each other.

The AI hyperscalers are, however, beginning to see external threats emerge – tougher regulation in Europe and stiffer competition from China – with cheaper and less energy-intensive alternatives fast emerging.

If AI sales slow, and slow rapidly, capital projects will not be so easy to scale back, Earnings will falter while high cash burn will continue. In turn, tech-buybacks will immediately become more difficult. Earnings and earnings potential will be revised downwards – and market valuations will be severely undermined.

Given the scale of things, an AI bubble bursting would be pretty devastating for the US and beyond.

The common denominator between these past episodes and present threats is the casino behaviour of US companies and investors.

Never has it been truer: when America sneezes the rest of the world catches cold. The Trump “tariff effect”, is likely to be no more than an Autumn sniffle compared to the Spanish flu an AI -induced bubble burst will bring.

Watch out Rachael Reeves!

Ewen Peters, Newton Mearns, East Renfrewshire

Ban carbon credits

In relation to your report about Brewdog having sold their “lost forest” (3 October), it is astonishing how many people are trying to get their tuppence out of planting schemes in Scotland.

That forest was funded through the Forestry Grant Scheme, ultimately paid for by the public. At their scale of operation, that should have been sufficient to make it work, and the Scottish Government would have been entitled to claim credit for it, and put any carbon gains against emissions elsewhere. Brewdog claimed to have funded it themselves, and set it against their own emissions. Now the site has been sold, and the carbon credits will have been picked up by someone else. So now, the site will be triple claimed. The objective of the new owners will clearly be to make money, not to establish woodlands or save the planet. Their best means of doing that will be to sell it on when it appreciates another bit, and then someone else will claim that they should take credit for planting the trees. It can go on ad infinitum, at least until the inevitable market correction.

The only effective investment in our environment was the initial grant funding from us. All the subsequent interest and purchases are simply blowing up the value of land, and that is not a good thing for our wider rural economy. Indeed, the prospect of carbon credits encourages people to plant denser woodlands than we need, and the outcome will ultimately be plantations, not woodlands, with a huge amount of environmental damage built in.

If people want to invest in planting trees, they would be better paying their money in to a ring-fenced government fund that bolsters the grants already available. Carbon credits should be made illegal and their trading banned, and that would burst the bubble of land prices.

As it stands, carbon credits are bringing forestry in Scotland in to disrepute. A small number of speculators may be gaining. The environment is not.

Victor Clements, Native Woodland Advice, Aberfeldy, Perth and Kinross

Zonal pricing

Lyndsey Ward of Communities B4 Power Companies, makes some points I’d agree with; and some I wouldn’t (Letters, 3 October).

For example – John Swinney isn't the only one who thinks we'd be paying less for our electricity were Scotland independent. The heads of Octopus Energy have been saying for some time that, even tied to Westminster, we in Scotland could – even should – be enjoying “the lowest prices for electricity in Europe” instead of, at present, paying the highest. And that those low prices would be achieved by the introduction of zonal pricing for electricity which, due to our abundance of wind turbines that already produce more electricity than we need, at the lowest prices, would be the main driver.

But Ed Miliband (who Ms Ward also mentions) has flatly rejected zonal pricing on the grounds that users in London and south-east England would be paying higher prices than we in Scotland. And that’s because they rely (when not enjoying our excess and increasing production that's being cabled south) on the most expensive form of generation – gas-fired power stations, on which our own retail pricing is based.

Where I’d agree with Ms Ward is in Mr Swinney’s government accepting even more wind turbines and the associated pylons and other infrastructure – instead of challenging Mr Miliband on zonal pricing.

Perhaps Holyrood could extend the planning moratorium over new nuclear and fracking to include onshore and offshore wind, unless and until zonal electricity pricing is introduced? If, despite that line being taken, Westminster still refuses to introduce zonal pricing then, of course, the only way we could enjoy those lower prices would be by achieving our independence.

Ian Waugh, Dumfries

Crying wolf

With reference to recent and apocalyptic references to climate change: in 2007, Al Gore, US Vice-President under Bill Clinton until 2001, received a Nobel Prize. In his acceptance speech, Mr Gore, a keen environmentalist, warned that that the Arctic could be ice-free “by as soon as 2014”.

In fact, the Arctic ice cap had 500,000 square kilometres more ice when last recorded in September of this year. So, Mr Gore was a fraction out on that prediction.

Yet these constant swings back to reality do not seem to faze the climate doomsayers. Mr Gore has most likely been followed by more extremists trying to create alarm and attention. They have now become a tad boring. I am sure most are well-meaning but that is not an excuse.

Someone should read to them the fable of the boy who cried wolf.

Alexander McKay, Edinburgh

Passing the buck

That must be some kind of new record set by an SNP minister. Jenny Gilruth, the Education Secretary, has foisted two decisions that fall under her remit onto others within the same week.

Firstly we had the issue of toilets in schools where she erroneously claimed it was for education authorities to decide if trans pupils could use the facilities they felt more comfortable with. Wrong! It is for education authorities to adhere to the law which says biological sex determines which toilets we use.

Then a matter of days later, although she apparently agrees that mobile phones should be banned from classrooms, she now passes the buck to individual headteachers (Scotsman, 2 October). They may be empowered to do so, but surely it makes more sense for it to be a Scotland-wide decision.

When interviewed by the BBC on September 29, regarding the toilet situation, she claimed “We don’t foist decisions on schools in Scotland. We work with our education authorities”. Really? What a short memory our Education Secretary has! Back in October 2024, she warmed councils she would withhold £145.5m of funding if local authorities cut teacher numbers. Clearly she only wants to make decisions which reflect well on her and the SNP government.

Jane Lax, Aberlour, Moray

Moral morass

The Manchester synagogue attack was perpetrated by only one man but the real terror is surely the crowds who came out the same night protesting about Gaza and who were completely oblivious to the national tragedy that had just occurred.

Our society has taken the easy route and let protests become more and more outrageous under the tainted banner of “free speech”. This is made even more troubling as the freedom to criticise appears to be only allowed if it is mainly from the far left.

What kind of society is going to emerge from this moral morass? A reality check by politicians is urgently needed. The UK is changing its character and not for the better.

Gerald Edwards, Glasgow

Shaping values

In expressing his opposition to the Scottish Parliament’s bill which would allow children to opt out of school religious activities, Rev Stephen Miller, has told the Human Rights, Equalities and Civil Justice Committee that, “opting out leaves children without an understanding of the beliefs, practices, and values that shape our diverse society.”

To which “shaping” beliefs is he referring? Was it the Kirk’s vehement opposition to LGBT equality? Its condemnation of women’s control of their own fertility? Its insistence on teaching antiscientific ideas in class, or are we going back to witch burning?

When will the religious understand that morality and social values are not only entirely possible without their doctrines but better served by their absence?

Neil Barber, Edinburgh Secular Society

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