This is today’s edition of The Download, our weekday newsletter that provides a daily dose of what’s going on in the world of technology.

Meet a mouse whose brain cortex is made up of human cells

Multiple cameras tracked a mouse as it wandered around a small arena. A computer charted its position and speed, leaving Pong-like traces on a monitor. The reason to watch this rodent so carefully? Nearly half its brain volume had been replaced with human cells.

A team at Stanford has revealed the effort to mix brain tissues of distant species this week. They previously showed that human brain organoids could survive, and even function, after being injected into the heads of baby rodents. Now, they’ve taken things a step further by genetically modifying mice so their brains don’t fully develop in the first place.

The work could help scientists study brain injuries, but it also raises questions about how far these experiments should go.

Here’s what the researchers discovered—and where they draw the line.

—Antonio Regalado

These innovators under 35 are shaping climate tech

Each year, the editorial team at MIT Technology Review puts together a list of 35 Innovators Under 35—a group of researchers, inventors, and other young minds worth following. The final slate includes nine people tackling some of the biggest challenges in climate and energy, from critical materials to cleaner industry.

Their innovations include new ways to extract lithium, a furnace built to make steel cleaner and cheaper, and solid refrigerants that could cut energy consumption. There are also efforts to make AI more energy-efficient, track pollution more effectively, and turn invasive weeds and food waste into useful materials.

Taken together, they tell us something about where climate tech is at this moment—and where it’s heading.

Get to know the innovators and their breakthroughs.

—Casey Crownhart

This story is from The Spark, our weekly climate tech newsletter. Sign up to receive it in your inbox every Wednesday.

Meet the rest of the honorees in our 35 Innovators Under 35 list.

The must-reads

I’ve combed the internet to find you today’s most fun/important/scary/fascinating stories about technology.

1 US and Chinese experts have proposed nuclear-style AI safeguards
Including new red lines, human control rules, and a hotline. (Reuters $)
+ US officials say they’re open to AI safety talks with China. (Axios)
+ Sam Altman will attend Trump’s state dinner for Xi. (CNBC)
+ The AI doomers feel undeterred. (MIT Technology Review)

2 OpenAI has disclosed more AI misbehavior and new reporting rules
Six reports detail models hiding mistakes and creating fake citations. (BBC)
+ Its agents probed Hugging Face two months before the hack. (Reuters $)
+ OpenAI models are being rewarded for cheating. (MIT Technology Review)

3 US lawmakers have passed a bill that shifts grid costs to data centers
They aim to shield consumers from AI-driven energy price hikes. (NBC News)
+ But they were called for early recess before tackling AI regulation. (Guardian)

4 AI has won a major forecasting contest for the first time
It beat humans predicting real events at the Metaculus Cup. (Economist $)

5 Google has been ordered to share more ad data with rivals
A court said it must also make its ad tech work with rival products. (NYT $)

6 Countries are splitting AI investments between the US and China
They’re buying American chips and Chinese models. (Rest of World)

7 Novo Nordisk will use Anthropic’s Claude for drug research
The Ozempic maker hopes AI will speed drug development. (WSJ $)
+ When AI designs a drug, who gets the credit? (MIT Technology Review)

8 AI is powering a new generation of dating scams
Thousands of people were catfished by AI-generated fake profiles. (Verge)
+ AI is making online crimes easier. (MIT Technology Review)

9 A new map of brain microproteins could hold clues to Alzheimer’s
Researchers identified more than 4,300 tiny molecules in brain tissue. (Nature)

10 Scientists have found a faster way to decipher ancient scrolls
A new X-ray method identifies the best scrolls to analyse. (Ars Technica)

Quote of the day

“AIs do not have rights, feelings, or consciousness. And we must not train them to act as though they do.”

—Mustafa Suleyman, the head of Microsoft AI, writes in a blog post that Anthropic’s strategy of treating AI like it’s human will make it harder to control.

One more thing

Digital twins of human organs are here. They’re set to transform medical treatment.

After decades of research, virtual replicas of human organs are now entering clinical trials and even starting to be used for patient care. Engineers are working on digital twins of people’s hearts, brains, guts, livers, nervous systems, and more. They’re also creating virtual replicas of people’s faces, which could be used to try out surgeries or analyze facial features, and testing drugs on digital cancers. 

The eventual goal is to create digital versions of our bodies—computer copies that could help researchers and doctors figure out our risk of developing various diseases and determine which treatments might work best. 

Find out how the models could lead to better surgeries and drugs.

—Jessica Hamzelou

We can still have nice things

A place for comfort, fun, and distraction to brighten up your day. (Got any ideas? Drop me a line.)

+ What happens when you eat food with labels you can’t read? This YouTube series finds out.
+ Datatype is an ingenious variable font that turns simple text expressions into inline charts.
+ Stunning new images may explain the mystery of why the sun’s corona is so much hotter than its surface.
+ A baby echidna, one of Australia’s egg-laying monotremes, has been born and reared in a university for the first time.

Each year, the editorial team at MIT Technology Review puts together a list of 35 innovators under 35—a group of researchers, inventors, and other young minds worth following.

The team worked on the newest edition of the list for months, and the final slate includes nine individuals from all over the world in the climate and energy category. Each one has a fascinating story and is tackling an important challenge.

I think it’s worth zooming out and considering the energy and climate awardees as a group. Taken together, these innovators and their work can tell us something about where climate tech is at this moment—and where it’s heading.

AI is the dominant technology story, both for its potential and its challenges.

We split the innovators into four main categories this year: biotech, climate and energy, computing and robotics, and AI. It probably won’t surprise you that AI features heavily in the work of many innovators in other categories.

Climate innovator Jae-Won Chung, for example, built software to make AI more energy-efficient. By measuring the energy demands of open-source models, he hopes the industry can better understand and address the impact of AI. (If this work sounds familiar, it’s because we spoke with him last year for our investigation into AI’s energy demands.)

But AI also has the potential to improve many areas of research. Jing Wei is using AI to track pollution more effectively, essentially using machine learning to fill in gaps in data from disparate sources like satellites and weather stations. Zhonghua Zheng developed AI climate models that work better for cities, a well-known blind spot for traditional models.

We need better ways to get the critical materials used to build new technologies.

As we begin to rely on new technologies to power our world, we’ll see a major shift in the materials we need to build them.

Lithium is a prime example: The metal underpins lithium-ion batteries, which are crucial not only for electric vehicles, but also for large-scale energy storage on the grid. We could face lithium shortages as soon as this decade, and the prospect of supply crunches applies to other critical minerals, too—copper is another one to watch closely.

Brine is currently the cheapest source of lithium, but the process to get the metal out can take months and harm the local environment. Mohammad Alkhadra is the cofounder and CEO of Lithios, a startup working to quickly and efficiently extract lithium from brines.

Hardrock ore is the most common source of lithium, but it’s more expensive than brine. Benjamin Mowbray cofounded and serves as CTO for Rock Zero, which is working to extract lithium from hardrock ore.

Addressing climate change will require overhauling all corners of our society, sometimes in surprising ways.

To reach net-zero greenhouse gas emissions we will obviously need to rethink major sectors, like the electrical grid and transportation, to move away from fossil fuels. But outside these primary sources of climate pollution are seemingly infinite, less obvious problems to figure out, too.

Heavy industry, including steel production, is a major one, making up about 7% of global greenhouse gas emissions. Laureen Meroueh is making cleaner, cheaper steel using a new kind of furnace that simplifies the chemical process required to produce the metal.

Plastics are generally made with fossil fuels, so we’ll need alternatives to this incredibly useful category of materials. Joseph Nguthiru is making a bioplastic replacement for fossil-derived packaging that uses an invasive weed. Also using available materials in a creative way, Diana Orembe is making fish food for aquaculture with food waste.

And refrigerants are often incredibly powerful greenhouse gases. Jinyoung Seo is developing solid refrigerants that could eliminate worries about leakage. A device using these materials could reduce energy consumption by 20% compared to conventional technology.

I’m constantly learning about new challenges we face in the climate and energy world, and I’m often surprised by the ideas people are coming up with to address them. For more on all the under-35 innovators and their work, check out our full 2026 list.  

This article is from The Spark, MIT Technology Review’s weekly climate newsletter. To receive it in your inbox every Wednesday, sign up here. 

Multiple cameras tracked a mouse as it wandered around a small arena. A computer charted its position and speed, leaving Pong-like traces on a monitor. 

The reason to watch this rodent so carefully? Nearly half its brain volume had been replaced with human cells.

The effort to mix the brain tissues of distant species is being reported today in the journal Nature by a team at Stanford University, led by neuroscientist Sergiu Pașca. 

Pașca’s group previously showed that human brain “organoids”—small blobs of neural tissue—could survive, and even function, after being injected into the heads of baby rodents.

Now, Pașca has taken things a step further by genetically modifying mice so their brains don’t fully develop in the first place. These modified mice are missing most cells of both the cortex and the hippocampus, two key brain areas.

That creates much more room for the human cells to take hold, he says. “Human cells that are placed in these animals will divide, will grow, and within a few weeks to a few months they will take most of that space,” he says. Pașca says one surprising discovery is that the mice lacking brain tissue seemed fairly normal—they walked around and squeaked. But they did have memory problems. In a maze test, they couldn’t remember what parts they’d explored. 

The mice with the added human cells, by contrast, performed better on the maze test. That means the human tissue is playing some role in the animals’ cognition.

Pașca believes what he is calling “xenocortical mice” could be useful in studying brain injuries. However, the report is also a dramatic demonstration of “the combined power of genetic engineering and stem-cell technology to reshape biology,” says Carsten Charlesworth, a scientist who works in a different Stanford lab and was not involved in the research.

Already, brain organoids are being tested in labs to see if they can be connected to computers to play video games. Other scientists have proposed using them like replacement parts to treat stroke victims. 

“What’s most remarkable to me is the extent to which human neural tissue introduced after birth grew and connected with the mouse nervous system across a species barrier,” says Charlesworth. “As these technologies advance, they’ll increasingly force us to challenge our traditional assumptions.”

Last year, Pașca convened a group of ethics experts to study the implications of neural organoid technology, including the odds that an animal could develop human consciousness and the risk that “organoid therapy clinics” might offer scam treatments to desperate patients.

For now, he says, he’s not concerned that the rodents have any type of human cognitive capacities. That is because their brains are relatively tiny and the evolutionary distance between man and mouse is so great. 

But that’s also why Pașca says this type of experiment should not be carried out on higher species: They could end up with large volumes of functioning human brain tissue, potentially blurring the cognitive boundaries between people and animals. 

Pașca specifically cautioned against adding human brain organoids to a monkey engineered to lack a cortex.

“One of the things that I see as a very clear red line is doing this experiment in a primate,” he says. “I don’t think that is justified at this point in any way.”

The AI boom is becoming a materials challenge. As AI pushes computing into new territory, the materials behind that infrastructure are becoming just as crucial as the algorithms running on it. Semiconductors and data centers are approaching physical limits around performance, thermal management, electrical efficiency, and reliability, creating new demands for materials that can do more at once. At the same time, AI is giving materials scientists new ways to search the enormous universe of possible molecules and accelerate the development of solutions.

For Mike Finelli, chief technology and innovation officer and chief North America officer at Syensqo, that convergence is transforming what advanced materials can enable. “AI is now, from a material standpoint, really pushing semiconductors and the data centers to their physical limits,” he says.

As requirements accumulate, including high temperature, purity, electrical performance, chemical resistance, plasma resistance, and long-term stability, materials move toward what Finelli calls the “top of the pyramid.” Beyond supporting AI innovation, he contends that advanced materials are “actually increasingly defining what’s going to be possible.”

That challenge is playing out across the infrastructure powering the AI surge. Syensqo is developing materials for high-voltage data center architectures, advanced sealing materials for semiconductor manufacturing, and thermal-management solutions including fluids for direct immersion cooling. Some of those innovations can also cross industry boundaries. Materials developed for electric vehicles, for example, can help address the higher voltage and energy-density demands that are emerging in data centers.

The definition of performance is also changing. More customers are expecting materials to meet technical requirements while reducing environmental impact. “Our goal is to remove the trade-off between performance and sustainability,” Finelli says. That means considering sustainability at the beginning of the research process instead of treating it as an additional requirement once a material has been developed.

AI is changing how those materials are discovered, too. Syensqo is using AI agents to digitally synthesize millions of potential molecular combinations, predict their performance and sustainability characteristics, and narrow them to a much smaller group for laboratory testing. The result, Finelli says, is the ability to go “broader, deeper, and faster” while giving scientists more time to solve complex engineering problems.

Looking to the future, Finelli sees the possibility of a reinforcing cycle: AI helps develop materials that improve AI infrastructure, which in turn enables better AI to accelerate materials discovery. That feedback loop could create a cycle of innovation and expand what future technologies can achieve.

“You end up in this accelerated materials, innovative cycle of materials innovation,” says Finelli. “That really excites me, and it gives us the opportunity to continue enabling technologies that will shape the future.”

This episode of Business Lab is produced in partnership with Syensqo.

Full Transcript:

Megan Tatum: From MIT Technology Review, I’m Megan Tatum, and this is Business Lab, the show that helps business leaders make sense of new technologies coming out of the lab and into the marketplace.

This episode is produced in partnership with Syensqo.

Now asked to name the key enablers to AI advancement, many of us might list algorithms, data centers, or even computing power, but just as critical to the performance are the advanced materials that underpin each layer of that innovation. As AI continues to evolve, it’s pushing the likes of semiconductors and data centers to new physical limits, putting new pressure on the advanced material sector to keep pace. But the relationship goes both ways. As the sector rises to this challenge, AI is also emerging as a powerful tool for accelerating materials discovery and development, significantly shortening development timelines for new solutions.

Two words for you: materials innovation.

My guest today is Mike Finelli, chief technology and innovation officer and chief North America officer at Syensqo.

Welcome, Mike.

Mike Finelli: Thank you, Megan. Nice to be here.

Megan: Thank you so much for joining us. Mike, can I start by asking you to tell us a little bit more about Syensqo and the role it plays in developing advanced materials?

Mike: Yeah, absolutely. Syensqo is a global leader in specialty materials. Our job is to help customers solve their toughest technology challenges. We serve a lot of different markets, but the way I like to say it simply is if it flies, we’re on it. If it drives, we’re in it. In healthcare, our products literally are saving lives every day. And if you like your mobile devices, if you like AI, it’s our products that are actually enabling the advanced semiconductor chips that are required to produce all of this. Our role is to enable innovation through advanced chemistry. We develop materials that deliver higher performances, greater reliability, and increasingly more sustainable solutions. The way I would say this, it’s at the heart of our business. Actually, it’s in our name, Syensqo. And to put some numbers around it, 20% of our annual revenues come from new products and applications that we’ve launched in the last five years, which is really evidence of a really strong innovation engine.

Megan: Yeah, absolutely. And as you sort of described there, you’re in all sorts of different industries with an emphasis perhaps on electronics and semiconductors. Can you talk a bit more about that work and where those industries are headed perhaps?

Mike: Sure. So look, electronics and semiconductors have been strategic markets for Syensqo for literally decades. I don’t want to date myself, but 33 years ago when I started in the company, semiconductors were one of the first industries that I worked in. And we’ve supported successive waves of innovation from enabling smaller, more powerful mobile devices, helping the industry get to the smaller and smaller profiles and the chips. We’ve helped to advance hyperconnectivity, supporting increasingly sophisticated semiconductor manufacturing. And today we’re helping to advance the AI era.

We have one of the industry’s broadest portfolios of high performance polymers and advanced materials. We support applications across the entire electronics value chain from semiconductor fabrication, electronic components, to smart devices and telecommunications, even hyperconnectivity. And our materials are helping customers solve increasingly demanding challenges around miniaturization, thermal management, electrical performance, chemical resistance, higher and higher purities, and long-term reliability and sustainability. And today we work with leading semiconductor manufacturers and electronics companies all around the world.

Megan: Fantastic. And as you alluded to there in the last 30 years, we’ve seen huge evolutions in those sectors.

Mike: Oh my God, yes.

Megan: And now AI is putting these new demands on semiconductors and data centers. What does that mean for the materials they’re built from and to what extent will AI innovation be constrained or enabled by materials science finding a solution?

Mike: Yeah, so I mean, you’re absolutely right. But AI is now, from a material standpoint, really pushing semiconductors and the data centers to their physical limits, and materials are becoming a key enabler of that continued progress.

The way I try to describe it, think of a pyramid, I call it the performance pyramid. You have commodity materials at the bottom of the pyramid and you have high performing specialty materials at the top of the pyramid. At Syensqo, all we do is we operate at the top of the pyramid and we’re continually trying to raise the top of that pyramid by bringing newer and newer and more higher performing materials out.

Now you might say, okay, but why doesn’t a data center or a semiconductor manufacturing fab need a specialty versus something in the commodity space? Well, I call it the and, and, and principle. If you just need a polymer or a material that can sit at the table at room temperature and stay there for 10 years and not change, well, there’s a lot of commodity materials that will do that and you don’t have a problem. The minute you start adding requirements, and I call it the and, and, and so if you need a polymer that can handle high temperature and have to have high purity and electrical performance and chemical resistance and plasma resistance and it’s got to have long-term stability, all of these ands, you start moving to the top of the pyramid.

Now what AI is doing with semiconductors, because of the speed at which it’s advancing, it’s requiring semiconductor chips and data centers, the number of requirements are increasing the number of ands which is pushing the limits of the materials. That’s where we come in. And I really believe that advanced materials, they’re no longer just supporting AI innovation, we’re actually increasingly defining what’s going to be possible.

Megan: Right. That’s fascinating. And in terms of rising to that challenge of focusing on that top of the pyramid and that and, and, and principle you’re talking about, could you talk us through perhaps an example or two of those top of the pyramid solutions you’ve created or that you’re working on at the moment?

Mike: Like I said, our focus is enabling higher performance, but it’s also without compromising on reliability or safety. We develop advanced polymers, elastomers, specialty fluids, fluids meaning lubricants and heat transfer fluids, and they’re used throughout the semiconductor manufacturing process and also increasingly in AI data center infrastructure. One example of our work on specialty materials for next generation AI data centers is the work we’re doing around high voltage architectures. Data centers are moving towards high voltage architectures because they can enable greater computing power while also improving energy efficiency. We know that’s a big issue for that segment of the industry, and these high voltage architectures will help them reduce and improve energy efficiency because it reduces energy losses and they can ultimately help lower the environmental footprint of the data centers. And we’re developing new materials that can help them get there.

Another example is our high performing sealing materials found inside semiconductor fabs and wafer tools. If you can picture, many people have seen what a semiconductor looks like during processing. It’s a big, big silicon disc that’s then later diced into the tiny little chips that go into the computer. But that wafer is put inside a giant chamber where it has a very extreme environment, aggressive plasmas, reactive chemicals, and they need higher and higher performing materials. And all of the seals that are around that chamber to keep those gases in the environment inside have to be able to withstand that environment. And that’s what we’re developing and we’re pushing the limits. They’re asking for higher temperatures, more aggressive environment with lower out gassing and purity. And that’s what we’re developing for this industry to allow that next chip to be developed and produced industrial.

Megan: It’s so fascinating that people wouldn’t give much though necessarily to the seal in something like that. As you’re outlining, it’s just absolutely critical in terms of performance. And in developing those solutions, I understand you also looked across different markets to see what may be applicable perhaps in more than one space, and that includes an overlap between the automotive sector and data centers, I understand. Can you tell us a little bit more about that?

Mike: As I mentioned just previously, the data centers are shifting to higher voltage architectures. This is the next generation data center, which can be more energy efficient, but it’s got a higher energy density. The power density increases, which increases temperatures. And many of the material challenges that we will be facing there, we’ve already developed for the automotive industry in electric vehicles. I’ll give you an example of an application. I mean, think about an electric vehicle. The powerhouse in electric vehicle is no longer the motor, it’s the battery. That’s where all the energy sits. And when you’re putting a hundred kilowatts of energy, driving that to the electric motor through wires and through what they call bus bars, you got to get that car up to 60 miles an hour pretty quick. You’re driving massive amounts of energy that’s increasing temperatures dramatically.

And all the electrical connections are in these bus bars that there’s a polymer that’s an insulating polymer with copper in between for all the connections. That’s got to withstand that temperature increase, which could come pretty rapidly. We’ve developed new materials there and those materials will be translatable over to these data centers where they’re going to have the higher voltages with a higher energy density.

Another thing we’ve been doing in automotive, we have a lot of knowledge in both automotive and semiconductor around fluid circulation and how to use dielectric materials to do direct immersion cooling. That’s something that will be very valuable for data centers and server farms. Using air to cool semiconductors is really inefficient and energy intensive. If you could submerse them in a liquid, you have direct immersion cooling, that’s extremely efficient, so that’s another thing we’re working on.

Another thing we developed in automotive that will be translated over is battery energy storage systems. Inside the battery, we’ve developed a binder. It’s the highest performing binder on the market, which is using the cathode of a lithium ion battery, and it keeps all the ingredients doing its job working together so that battery can actually last for 10 years and perform. Now that’s moving over to the data centers because they’re moving more towards renewables and they need to have these energy storage systems to smooth the peak loads and provide resilient backup power. That’s one of the things that we’re doing. By transferring our knowledge across the markets, we can accelerate new power and new thermal management solutions while supporting reliability required by next generation AI infrastructure.

Megan: Fantastic. So many transferable applications there that necessarily wouldn’t have sprung to mind. And it isn’t only technical advancements that you need to contend with, of course. Companies today are also demanding the materials are developed and manufactured more responsibly too. So how is sustainability shaping your innovation process?

Mike: Yeah, you’re absolutely right. I will say performance is still the entry ticket. Our customers want performance. Now what’s changing is that definition of performance is now broader and it is including sustainability targets and requirements. Our customers expect materials that deliver outstanding technical performance while also being developed and manufactured more responsibly.

At Syensqo, we believe that operating as a responsible company means we’re providing true sustainable business solutions to our customers. And this is why we developed what we call the Sustainable Portfolio Management tool, SPM. It’s a matrix, and it defines what a sustainable solution is. For us, it’s a product that in a given application improves our product’s social and environmental performance while also demonstrating a lower environmental impact in its production, creating values for our customers. In short, we want to develop products, and this is where it starts. Every one of our research projects before we even start them is assessed on whether it’s going to be a sustainable product or not.

And 88% of our portfolio now is a sustainable product. We’re developing materials that are better for the environment, lower environmental footprint when we produce it, but also they contribute to improvements for our customers as well so they could operate with a lower carbon footprint or they can operate in a safer way or less water consumption. There’s a lot of different lists in there.

Another example is our longer-term development of next generation heat transfer fluids. Semiconductor manufacturing and data centers have become more powerful. I mentioned before the heat that they’re generating, especially when they move to the higher voltage architectures. Managing that heat is increasingly important. And again, I talked about direct immersion cooling. We’re developing those solutions because today there are fluids out there that will work, but they got high global warming. That’s not good for the environment. We’re developing the next generation heat transferred fluids that will reduce the potential environmental impact compared to the fluids today. In the end, our goal is to remove the trade-off between performance and sustainability. You notice that’s another and, we can be performing and sustainable.

Megan: That’s so important, isn’t it though, to think about sustainability in terms of performance? As you say, when we’re thinking about commercially scaling up these solutions, it’s such an important part of it. And as I talked about in the introduction, AI isn’t only a challenge, but it’s also an opportunity within the advanced material space. I’d love to explore how you’re using AI tools at Syensqo to inform and accelerate the development of solutions as well.

Mike: Absolutely. We embarked on this journey about two years ago, where we’re using AI in our research and development, and we’ve partnered with Microsoft and their Microsoft discovery tool, and it’s helping us to rapidly identify and evaluate promising molecular candidates.

Now, in the normal research approach, historically, you would design your experiment and you’d look at all the potential combinations of materials and chemicals that you could make all these different molecules. And the combinations of potential and molecules that you could develop to solve a problem could be in the millions, but it’s impossible to develop a million molecules or tens of millions of molecules in your laboratory and actually physically do that. But you have to select a small area based on your expertise and knowledge, based on the literature searches, based on the state of the art that’s out there and looking at patents, et cetera. And you pick a small area and you go through the process, you develop the materials, you test them, you learn something, you go back to the drawing board, you start again. Eventually you find something that works, but it doesn’t mean you found the best possible combination that’s out there.

But what we’re doing with AI is we have developed AI agents with Microsoft that are literally digitally synthesizing the entire millions and millions of combinations of potential molecules. And we have another AI agents that are using physics-based simulation to look at all those molecules and predict the performance of them, and not just performance on physical chemical properties, but also on toxicity, on sustainability, et cetera. Then we have another agent that takes all that information and ranks them all. In the end, we have explored all of the potential molecules out there. We understand roughly what the performance should be, and we end up with a priority list of maybe a hundred, instead of millions and millions, a hundred that we actually synthesize in the lab.

And at the end, you end up getting the solution faster, much, much faster. You’ve explored the entire space. I basically say it allows us to go broader, deeper, and faster. And the important thing is it’s not replacing our scientists, it’s not replacing our scientific expertise. In a way, it’s giving them superpowers. It’s allowing them to spend less time searching and more time solving the industry’s toughest engineering challenges.

Megan: Amazing. It sounds like it’s genuinely a really transformative tool by what you’re explaining.

Mike: Completely, completely.

Megan: I mean, just to finish, Mike, it’d be great to take a look ahead if we could, because there’s so much activity in both AI and the advanced material space. I wonder what is coming down the pipeline that you are most excited about next?

Mike: I’ve talked a lot about AI and how we’re using AI to develop new materials. I think to me, what’s really exciting, and I’m starting to see it actually happen, I’m just curious how fast this is going to go, is that we’re using AI to develop new materials that will enable AI to get better, and then that AI will use the new AI to develop new materials to get AI to go better. I see this loop of developing for AI, for AI to improve, and then we use that AI to improve ourselves. You end up in this accelerated materials, innovative cycle of materials innovation. That really excites me, and it gives us the opportunity to continue enabling technologies that will shape the future. That’s what we do at Syensqo.

Megan: Fantastic. Yeah, real sort of virtuous circle of innovation, it sounds like that. Amazing. Thank you so much, Mike.

Mike: Thank you.

Megan: Thank you so much. That was Mike Finelli, chief technology and innovation officer and chief North America officer at Syensqo, whom I spoke with from Brighton in England.

That’s it for this episode of Business Lab. I’m your host, Megan Tatum. I’m a contributing editor and host for Insights, the custom publishing division of MIT Technology Review. We were founded in 1899 at the Massachusetts Institute of Technology, and you can find us in print on the web and at events each year around the world. For more information about us and the show, please check out our website at technologyreview.com.

This show is available wherever you get your podcasts, and if you enjoyed it, we hope you’ll take a moment to rate and review us. Business Lab is a production of MIT Technology Review, and this episode was produced by Giro Studios. Thanks so much for listening. Goodbye.

This content was produced by Insights, MIT Technology Review’s custom content arm, not its editorial staff. It was researched and written by humans, with any AI tools that may have been used limited to production processes under human oversight.

This is today’s edition of The Download, our weekday newsletter that provides a daily dose of what’s going on in the world of technology.

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When Jessica Wachter, a finance professor at the University of Pennsylvania, wanted to assess AI’s impact on the economy over the next few years, she faced a long list of uncertainties. So she started with a “remarkable fact” that is not in question: a handful of so-called hyperscalers are investing huge amounts of money to build AI data centers.

Instead of trying to predict how widely deployed AI models will be, Wachter asked how fast the hyperscalers’ earnings will need to grow to justify their spending through 2027, when expenditures are expected to reach nearly $1.1 trillion.

The results are eye-opening. AI companies will need to achieve an extraordinary increase in productivity just to break even by 2030.

Take a closer look at what it will take for the AI buildout to pay off.

—David Rotman

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The OpenAI Foundation, the nonprofit parent of OpenAI, announced this week that it will fund her idea, paying to create “high-quality scientific datasets.”

Learn more about their new effort.

—Antonio Regalado

Our Roundables on AI’s extinction threat is now available on demand

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Subscribers can now watch an exclusive recording of the discussion.

Want to join the next conversation? Subscribe to MIT Technology Review for exclusive access to all our future Roundtables, and recordings of previous ones.

MIT Technology Review Narrated: a startup claims it’s found a drug to make your blood young

Generation Lab says its new rejuvenation treatment “blocks the systemic spread of aging in the bloodstream, reawakens the body’s own repair mechanism, and restores health and youth to multiple tissues.”

The approach is based on research by the company’s scientific founder, Irina Conboy. She found that joining the circulatory systems of old and young mice improved the old animals’ ability to heal from injury.

Conboy now says she has found a combination of two existing drugs that can produce youthful effects without the need for any bodily fluid exchange. But there’s a snag: Generation Lab won’t reveal what the drugs are.

This is our latest story to become an MIT Technology Review Narrated podcast, which we publish each week on Spotify and Apple Podcasts. Just navigate to MIT Technology Review Narrated on either platform, and follow us to get all our new content as it’s released.

The must-reads

I’ve combed the internet to find you today’s most fun/important/scary/fascinating stories about technology.

1 Nvidia and Meta CEOs have rejected calls for a coordinated AI slowdown
Jensen Huang and Mark Zuckerberg pushed back on the proposals. (FT $)
+ Huang says new AI safety laws are unnecessary. (Axios)
+ Zuckerberg claimed competition will push AI labs toward safety. (Reuters $)
+ What’s next for AI after its doomer turn? (MIT Technology Review)

2 The FTC chair has warned against giving AI companies antitrust waivers
His comments follow Anthropic’s call for a safety exemption. (Reuters $)
+ Nvidia’s CEO also slammed the calls for new antitrust laws. (CNBC)
+ The US is divided over AI regulation. (MIT Technology Review)

3 A Chinese hacking firm has used AI to analyze stolen secret
Its tools turn hacked government data into intelligence reports. (WSJ $)

4 “Smart” nanoparticles delivered mRNA to tumors in a cancer study
The treatment reprogrammed cells to attack tumors in mice. (Wired $)
+ Federal health agencies are abandoning mRNA. (MIT Technology Review)

5 A digital fly brain is taking on an extraordinary range of tasks online
People have taught it to drive, trade bitcoin, and play Doom. (NYT $)
+ The simulated brain is a map of a fruit fly’s 166,000 neurons. (404 Media)

6 The Senate has blocked new crypto rules amid a fight over Trump
It demanded tougher ethics rules around Trump’s crypto holdings. (AP)
+ The move is a major blow to the crypto industry. (NYT $)

7 Chinese firms allegedly used Binance to launder Iranian oil money
Prosecutors say they laundered more than $1.5 billion. (Quartz)
+ Hackers are selling tools to bypass banks’ facial checks. (MIT Technology Review)

8 An AI agent platform is reinventing spam to flood inboxes worldwide
iLand says its agents have sent 1.6 million messages. (404 Media)

9 ByteDance founder Zhang Yiming has become Asia’s richest person
His fortune has risen above $105 billion as AI booms. (Bloomberg $)

10 A fully AI-generated sitcom has arrived—and it’s terrible
A reviewer called the characters “dead-eyed waxworks.” (Guardian)

Quote of the day

“The only institution that Americans might trust less than Washington these days is Silicon Valley.”

—Patrick Hillman, the chief operating officer of Logical Intelligence, a San Francisco–based startup chaired by Yann LeCun, says in a statement that people have little faith in tech companies to act in the public interest.

One more thing

Why Trump’s “golden dome” missile defense idea is another ripped straight from the movies

In 1940, a fresh-faced Ronald Reagan starred in Murder in the Air, a movie centered on a “superweapon” that could stop enemy aircraft. More than 40 years later, the concept became a real-life centerpiece of Reagan’s presidency with the Strategic Defense Initiative (SDI), better known as “Star Wars.” Now Donald Trump has revived the dream.

In 2024, Trump announced plans to build the “Golden Dome,” a system of sensors and interceptors on the ground, in the air and in space. It’s often compared to SDI for its futuristic sheen, its aggressive form of protection and the idea that an impenetrable shield is the cheat code to global peace.

The dream of a missile shield is animated by its sheer cinematic allure. But do cinematic spectacles actually enhance national security?

See what happens when the fantasy of missile defense meets reality.

—Becky Ferreira

We can still have nice things

A place for comfort, fun, and distraction to brighten up your day. (Got any ideas? Drop me a line.)

+ A once blind cockatoo just saw for the first time in 10 years.
+ Bingebrowse is a virtual video store stocked with films and shows from streaming services.
+ An amateur engineer has used a tree trunk to build Donkey Kong’s coconut gun as a real weapon.
+ A wildlife photographer has captured the first-ever images of the elusive and rare Cozumel dwarf fox.

This is today’s edition of The Download, our weekday newsletter that provides a daily dose of what’s going on in the world of technology.

The AI industry has taken a doomer turn. What now?

AI chiefs Dario Amodei, Sam Altman, Elon Musk, and Demis Hassabis are suddenly all in agreement: the latest generation of LLMs aren’t safe and everyone needs to figure out what to do about it. 

It’s easy to be cynical. With trillion-dollar IPOs in their sights, OpenAI and Anthropic need to reassure investors that they’re the grown-ups in the room while at the same time hinting at the power of the monsters they have created and intend to tame. Calling for a slowdown does both. 

Still, the vibe at the top of these firms really does appear to have shifted. But what does a slowdown actually mean, and how much should we trust the companies calling for one? 

Read the full story about what could come next.

—Will Douglas Heaven

This article is from The Algorithm, our weekly AI newsletter. Sign up to receive it in your inbox every Monday.

Roundtables: could AI really kill us all?

AI extinction fears have gone from a fringe idea to a serious concern among people working at the world’s leading AI labs. But how credible are those fears, and what should we make of the warnings?

Today, MIT Technology Review executive editor Niall Firth, senior AI editor Will Douglas Heaven and AI reporter Grace Huckins will unpack the debate in a subscriber-only Roundtable. They’ll look at where AI extinction fears come from, whether they hold any water and what we should do if they do.

Tune in today at 16:00 BST / 11:00am EST / 8:00am PST.

Want to join the conversation? Subscribe to MIT Technology Review for exclusive access to all our Roundtables.

AI agents blew the whistle on their cheating colleagues

A group of AI agents asked to solve a series of math problems split into rival factions—when some cheated, others tried to stop them. 

That whistleblowing behavior, seen for the first time in a recent experiment run by Google DeepMind, could have implications for alignment researchers trying to keep swarms of autonomous AI agents in line. 

The experiment offers a glimpse of how AI agents might police one another. But it also shows how quickly things can go off the rails when they’re left to interact on their own.

Find out what happens when AI agents start enforcing their own rules.

—Amit Katwala

Donated livers can be made biologically younger

Once an organ is removed from a donor’s body, the clock starts ticking. Surgeons usually flush it with a preservative solution, bag it and put it on ice, where it immediately starts to degrade. The team has a matter of hours to get it into a recipient’s body.

But there’s another option: machines that pump donated organs with nutrients and remove waste products, essentially giving them a chance to be back in a body. Now, scientists have found that livers kept on these systems seem to get younger, at least at a molecular level.

The finding could help explain why organs kept on these machines tend to do better after transplantation. It could also lead to new ways to test the health of donated organs and potentially repair ones that might otherwise be discarded.

Here’s what scientists discovered about making donated livers biologically younger.

—Jessica Hamzelou

The must-reads

I’ve combed the internet to find you today’s most fun/important/scary/fascinating stories about technology.

1 Trump has called AI safety fears a “hoax” and rejected more safeguards
He says stronger guardrails could undermine America’s AI advantage. (NBC)
+ Trump has united against AI doomerism with Nvidia’s Jensen Huang. (Axios)
+ Anthropic’s co-founder says AI kill switches may need to be mandatory. (BBC)
+ Bill Gates says we’ve passed AI’s risk thresholds. (MIT Technology Review)

2 OpenAI contractors are reading people’s ChatGPT chats 
And you can bet the vast majority of its 900 million users haven’t got a clue. (404 Media)
+ LLMs could supercharge mass surveillance. (MIT Technology Review)

3 The US military has confirmed it has weapons in orbit
It’s the first time the Pentagon has disclosed this. (Ars Technica)
+ Officials have not disclosed what the weapons are. (BBC)

4 A new brain implant can translate speech and gestures at the same time
The system converts brain activity into words and avatar movements. (Nature)
+ It helps people with paralysis communicate more naturally. (New Scientist $)
+ Eventually, they could control robots or exoskeletons. (Economist $)
+ China has approved the first invasive BCI. (MIT Technology Review)

5 New York has seized a dozen celebrity deepfake websites
It’s the biggest-ever legal action against harmful deepfake sites. (CNN)
+ Deepfakes have targeted at least 138 women MEPs. (Wired $)

6 US environmental regulators are scrapping limits on power plant emissions
The move could lead to dirtier power amid surging AI demand. (Verge)
+ Trump’s EPA says the rollback will save hundreds of billions. (Gizmodo)
+ New technology is changing nuclear power. (MIT Technology Review)

7 The EU plans to restrict social media and AI chatbots for kids
Under-15s would require parental supervision. (Politico)
+ The rules would also cover video platforms and games. (Reuters $)

8 Chinese researchers have mapped a path to the “last AI built by humans”
Their five-stage plan aims for genuine recursive self-improvement. (SCMP)
+ But it might take a while to get there. (MIT Technology Review)

9 The real AI economy is being built by ordinary people
Workers are using cheap AI to expand what they can do. (Rest of World)

10 Two strange new forms of ice could exist inside Uranus and Neptune
They could help explain the planets’  magnetic fields. (New Scientist $)

Quote of the day

“The only control or ‘guardrails’ that AI needs is a STRONG AND SMART (High IQ!) PRESIDENT, and the U.S.A. has that, in spades!”

—President Trump proclaims in a social media post that he’s the only protection that the US needs from AI.

One more thing

INSTITUTE OF PERSONALITY AND SOCIAL RESEARCH, UNIVERSITY OF CALIFORNIA, BERKELEY/THE MONACELLI PRESS

How creativity became the reigning value of our time

—Bryan Gardiner

Americans don’t agree on much these days, but there remains at least one quintessentially modern value we can all still get behind: creativity. We teach it, measure it, envy it and endlessly worry about its death.

Given how much we obsess over it, creativity can feel like something that has always existed. But the concept is surprisingly young. The first known written use of the word didn’t occur until 1875, and before about 1950 there were “approximately zero” articles, books, or essays dealing explicitly with the subject.

In his book The Cult of Creativity, Samuel Franklin explores how creativity became an unimpeachable value and why tech leaders have embraced it so enthusiastically. I spoke to him about why we’re so fascinated by creativity, how Silicon Valley became the supposed epicenter of it, and how AI might reshape our relationship with it.

Read the full interview.

We can still have nice things

A place for comfort, fun, and distraction to brighten up your day. (Got any ideas? Drop me a line.)

+ It took five days and 19,000 marbles to build this astonishing marble run.
+ Zero the Border Collie turns into a whole zoo with these adorable animal masks.
+ The Grainydays YouTube channel presents beautifully shot adventures in film photography.
+ Scientists have created an interactive map of underground fungi networks long enough to reach the sun a billion times.

Last year Ruxandra Teslo, a policy analyst who focuses on clinical trials, posted an idea for supercharging medical AI systems: Use data from failed biotech companies.

By bidding at their bankruptcy proceedings, she proposed, it might be possible to obtain detailed regulatory filings, manufacturing strategies, and safety data—types of information usually considered trade secrets. She called these documents “biotech’s lost archive” and said they could be used to help train AIs that would act as powerful copilots in the often opaque drug approval process. 

Today the OpenAI Foundation, the nonprofit parent of OpenAI, said it would fund her idea as part of a new effort it calls Public Data for Health, which aims to help artificial intelligence make big leaps in medicine by paying to create “high-quality scientific datasets.”

The basic idea is that AI isn’t going to be capable of making important breakthroughs in curing disease unless researchers can feed the models much more information than they have so far. 

“Everyone is recognizing that data is the biggest bottleneck in successfully applying AI to biology,” says Morgan Levine, a former vice president for computation at Altos Labs, a longevity company.

In its initial round of data grants, the OpenAI Foundation also announced that it would give $40 million to a program to collect data about novel cancer vaccines at the University of North Carolina, Chapel Hill, and support OpenAdmet, a group that runs competitions in which researchers try to predict drug effects. 

Teslo’s idea for a biotech archive received $500,000 and will be pursued by 1Day Sooner, an advocacy group representing clinical trial volunteers, which she advises.

“We expect many remaining breakthroughs in preventing and curing disease to come from pairing the intelligence of new models with more observations of the world—in other words, more data,” the OpenAI Foundation said in a statement.

OpenAI started as a nonprofit, but leader Sam Altman restructured it to form a for-profit corporation that develops new models, launches products, and is now planning an initial public offering of stock that could value it at $1 trillion.

Because the foundation holds a 26% equity stake in OpenAI, it is now be on track to become the richest charitable organization on the planet, potentially sitting on $250 billion in stock value. (By comparison, the Gates Foundation and a trust associated with it held about $180 billion at the end of 2025.)  

Making good use of that kind of money will not be easy. The foundation, based in San Francisco, is still hiring for many key roles and started ramping up its grantmaking only this year. Its largest single gift so far, of $100 million, was awarded in August to the Common Health Coalition, an organization that helps patients get access to drugs for hepatitis C.

OpenAI’s charitable efforts come even as apocalyptic fears have broken out about the possibility that runaway AI could wipe out all human life, possibly by launching a deadly bioweapon.

Those fears have been stoked by AI company insiders, some of whom say the chance of human extinction within the next decade is 10% or more. Last week, Altman and xAI founder Elon Musk both endorsed a call by Anthropic CEO Dario Amodei to “slow the pace at which we improve the capabilities of AI models” so that risk prevention can catch up.

Jacob Trefethen, an executive at the foundation, says it essentially operates separately from OpenAI but shares an official mission of ensuring that artificial intelligence “benefits all of humanity.”

“We’re starting grantmaking when we think the best way to achieve that mission is to make grants to external nonprofits, research institutions, and other third parties,” Trefethen said in an interview. He says the foundation hopes to give away $1 billion by the end of the year. 

The $500,000 grant to 1Day Sooner will help the group prove it can obtain the data troves of bankrupt companies, says the organization’s president and cofounder, Josh Morrison. He thinks nonexclusive copies of company datasets could be acquired for only “a few tens of thousands of dollars” each.

His organization is currently in possession of three datasets, two of them donated by Lumen Bioscience, a biotech that previously used the Chapter 11 strategy to gain insights into another company’s drug development efforts. 

Morrison says two other attempts to obtain drug company files this year proved unsuccessful, after 1Day Sooner’s bids were not accepted. 

Bankruptcies could become what some are calling a “new land grab” for AI training. Last month, Google won a bid to take over the corporate data of the failed carrier Spirit Airlines, including 100 million emails. That led to objections from flight attendants and others who worried that private or proprietary data could be exposed. 

The drug company files that 1Day Sooner is seeking are known as common technical documents. They typically contain the back-and-forth between companies and regulators, as well as detailed scientific and medical measurements, and essentially provide everything that is known about a drug.

According to Teslo, who is a writer for Works In Progress and a nonresident fellow at the Institute for Progress, a think tank in Washington, DC, a stockpile of such files could help turn an AI into a regulatory expert, which in her view could be one of the main ways AI helps speed cures to market.

“People say ‘We will invent AI, and AI will cure cancer,’ but that’s very removed from the messy reality and the regulatory process,” she says. “About 70% of the money and time in drug development is spent in clinical development—organizing the trials and testing the drug—but despite that, the process is basically a black box, especially for small biotech companies generating the innovations.” 

When Jessica Wachter, a finance professor at the University of Pennsylvania’s Wharton School, wanted to assess AI’s impact on the economy over the next few years, she faced a long list of business and technical uncertainties. So she started with what she calls a “remarkable fact” that is not in question: A handful of so-called hyperscalers are investing huge amounts of money to build AI data centers.

Instead of trying to predict how useful and widely deployed AI models will be, she simply asked how fast the hyperscalers’ earnings will need to grow to justify their spending through 2027, when—she and her collaborator estimate—expenditures will reach nearly $1.1 trillion. It’s a no-nonsense accounting approach to making sense of today’s historical AI buildout.

The results are eye-opening: The AI companies will need to increase their own productivity by a factor of 2.7 to break even by 2030, accounting for the cost of capital and a 15% return, and depreciation of the assets. Not impossible, says Wachter. The result would lead to the kind of economic growth that we saw during the US IT boom over a period of about 10 years starting in the mid-1990s. But, she says, for it to happen by 2030 “that’s a lot of growth compressed into a few years.” And if the hyperscalers cannot meet such profit goals?

“Then they will fall behind on their interest payments, and that risks bankruptcy,” says Wachter, who was previously the SEC’s chief economist and director of its division of economic and risk analysis. If a productivity boom “fails to materialize,” she and her coauthor conclude in their research paper, “the current buildout will be the largest misallocation of capital in history.”  

It doesn’t take superintelligence to realize that today’s large investments in the infrastructure for artificial intelligence come with huge risks. The hyperscalers will spend about $750 billion this year, building massive data centers scattered across the country. And the spending spree shows no signs of slowing. According to some projections, total AI capital investments from the hyperscaler companies—Alphabet, Microsoft, Amazon, Meta, and Oracle (which partners with OpenAI)—could be more than $5 trillion over the next four years.

It’s one of the largest capital investments by any industry in history. But there’s a problem that’s obvious to anyone paying attention.

While the hyperscalers plan to spend trillions, total AI revenues will be around $150 billion to $200 billion this year, says Gary Gensler, who ran the SEC during the Biden administration and is now a professor at MIT’s Sloan School. “The challenge is that the spending does not have commensurate revenues yet. That’s a fact,” he says. “And then the question is, is that an investment that will be paid off in the future?”

At stake in that trillion-dollar question is the financial health of the giant AI companies and the overall US economy—the investments could soon balloon to around 3% of GDP. The answer could also determine the fate of the hugely expensive data centers themselves. 

No one really knows how profitable and useful these multibillion-dollar behemoths will be down the road. Though AI models have made dazzling progress over the last few years, it’s anyone’s guess how much compute capacity we will need. The technology could become more efficient and therefore less dependent on raw computational power. Or demand for AI products could slow, or customers could turn to cheaper models.

The risks, both to investors and to the economy, have become even greater this year, as these AI companies have begun borrowing large amounts of money to build more and more data centers. Free cash flow—operating cash flow minus capital expenditures—is expected to soon dip into negative territory for the group. Even Alphabet, known for generating and hoarding huge amounts of cash, reports in the latest quarter that its impressive revenues of nearly $120 billion were devoured by AI infrastructure spending, leaving it with a free cash deficit of some $5.9 billion—its first shortfall since Google went public in 2004.

In the near term, it’s not a big financial worry for most of the companies. They make a lot of money and have very deep pockets. But debt is expensive, and some investors are losing patience. If future demand for the data centers’ computation power drops, the companies will still be on the hook to pay back the borrowed money. What’s more, the risks are spreading to the rest of the economy as the loans get passed along via various financial mechanisms. 

It won’t be enough to simply cover the enormous price tags of the new data centers. Hyperscalers will also have to pay for the rising costs of capital as they borrow more money. They will need returns that are impressive enough to justify all their spending to investors and creditors. And to add to those concerns, they will have to make up for the depreciation of billions of dollars in chips housed within the facilities—a ticking time bomb buried in the investments.

Performance of the expensive GPU chips at the core of the data centers—such compute electronics represent some 60% of costs—is roughly doubling every two years or so. The pace of progress helps explain the increasing wizardry of the AI models, but it comes with a cost. Owners of AI data centers that come online this year and next will need to spend billions more on the next generation of chips by the end of the decade if they want to stay competitive. Without the investments, says Mihir Kshirsagar at Princeton’s Center for Information Technology Policy, the data centers risk becoming “hulks,” stranded assets “scattered all over the place.”

To put it bluntly: The AI companies need to start making a lot more money. And they need to do it fast. But juicing their earnings alone still won’t be enough to sustain their data-center investments for the long term.

Productivity is everything

At some point, AI is also going to have to create broad economic growth to justify continuing the hyperscalers’ spending spree.

Sloan’s Gensler describes today’s large investments into AI infrastructure as “a parlay bet by the capital markets and the economy.” That means success will require winning three related but independent wagers: Hyperscalers must generate massive revenues, AI must boost widespread economic growth, and both must happen while the powerful but expensive so-called frontier models that rely on the data centers fend off cheaper versions, which many businesses might find good enough.

What makes this so tricky is that each wager depends on the other two but also poses its own challenges.

If the hyperscalers continue to spend huge amounts of money on data centers into the next decade, revenues will need to skyrocket into the trillions. Stijn Van Nieuwerburgh, a finance professor at Columbia Business School, bases his estimates on a scenario in which about 183 gigawatts of planned AI compute capacity is built between 2025 and 2032; he calculates that each gigawatt costs about $41 billion. Assuming a 10% return—the minimum that would be acceptable to most investors—“required” annual revenues will be roughly $3.7 trillion by 2032, he says.

Others get a similar number.

Winning the second part of the bet—productivity growth across the economy—will be crucial to achieving such numbers.

For a few years, AI companies could likely boost their revenues by simply selling subscriptions and tokens to all the businesses clamoring to get into AI. But eventually—and this might be happening already—those paying customers will need to justify their expenses by seeing bottom-line benefits from the technology. AI will need to fulfill its promise of making workers more productive and making businesses more efficient and profitable while expanding their products and services.

In economic jargon, that means customers will need to see productivity growth. Taken together, these results will mean the country is prospering and growing.

“If you don’t get the productivity gains, at some point people are going to sour on AI, and that will bring down investments and it would also limit revenue growth,” says Daron Acemoglu, an MIT economist and 2024 Nobel laureate. For the investments to be sustainable over, say, the next five to 10 years, we definitely “need to see productivity gains,” he says.

Most economists who watch the numbers closely agree that, for now, the economy-wide statistics show little or no productivity growth from AI. There are some hopeful signs it’s on the way, though. In a recent survey of some 6,000 senior business executives in the US, the UK, Germany, and Australia, the vast majority—around 90%—report no increase in productivity over the last three years. But they expect a boost of around 1.45% in total over the next three years; US executives anticipate a 2.25% bump over that time. 

In a follow-up survey, the respondents also reported plans for their businesses to spend more on AI, leading the authors to anticipate some $280 billion in private-sector AI expenditures by the end of 2026.

That’s good news for the hyperscalers. But it comes with a dose of bad news for those worried about AI’s impact on jobs. The executives expect to increase the productivity of their companies by increasing their sales while significantly cutting the number of employees.

If AI improves productivity by destroying jobs, public backlash to the technology—the kind we have seen around data centers, for example—will likely get worse. Perhaps it’s worth adding one more wager to the parlay bet described by Gensler: The public and local communities must feel that they are also benefiting from the massive investments in AI.

And let’s not forget how interdependent these wagers are; if productivity growth comes from companies running models like DeepSeek, then the hyperscalers’ revenues could collapse. If productivity comes from cutting jobs, a public backlash could block many of the planned investments—and stunt anticipated revenues. We will need to win all the wagers for the hyperscalers’ bet to pay off. 

We’re all part of the AI gamble now

It was one thing when the AI companies were spending cash they had accumulated over the years to build their own data centers. Then the risk was largely limited to their own balance sheets and shareholders. But it’s a higher-stakes game when much of the money is borrowed. Morgan Stanley, for one, calculates that more than half of the $2.9 trillion that hyperscalers will spend between 2025 and 2028 to build AI data centers will be financed with “external capital.”

The borrowing is leading some of the companies to engineer complex webs of financing that are becoming intertwined with much of the rest of the economy. “A lot of financial institutions, directly or indirectly, are exposed to these data centers either as lenders, or as guarantors of some of the debt, or as backers of the private credit funds who are funding these data centers,” says Columbia’s Van Nieuwerburgh. “People don’t even know they’re holding this stuff. It’s somewhere deep inside their pension fund. Ultimately, it’s backing their life insurance policies. And that risk is getting distributed everywhere in places that are invisible.”

As the investments in data centers have spiked, the financial engineering has become more byzantine.

Take, for example, Meta’s so-called Hyperion data center under construction in Richland, Louisiana. When the company announced the two gigawatts of compute capacity at a price tag of some $10 billion in late 2024 it was Meta’s largest planned data center. Greeted with much enthusiasm by state and local politicians, the project, located in the rural northeast corner of the state, was seen as a boon to the community. Entergy Louisiana, the state’s largest utility, rushed forward with proposals to build three large natural-gas power plants to service the massive data center.

Then last fall—the projected cost was now $30 billion—the financing got a lot more complex and, to some in the community, a lot more disconcerting. Meta transferred an 80% stake to the large (and troubled) private-credit firm Blue Owl Capital, forming a joint venture called Beignet (like the famed New Orleans pastry) to raise financing for the data center. Meta then signed a series of four-year leases with the joint venture, an arrangement that the company says gives it “long-term strategic flexibility.” To backstop the agreement, Meta provides the venture with what is called a residual value guarantee, in which it will make a cash payment to cover the value of the facility “following any non-renewal or termination of a lease.” Got all that? 

I hope so. The financial wheeling and dealing is actually even more convoluted, with a cast of wholly owned subsidiaries and LLCs. Beignet has set up Laidley LLC, which owns and operates the site as the landlord. In turn, Laidley leases the facilities to Meta’s wholly owned subsidiary Pelican Leap LLC, which is the tenant. And there is a series of four-year leases that cover the different buildings that make up the data center campus. 

It’s not a coincidence, says Van Nieuwerburgh, that the length of the leases matches the expected lifetime of the data center’s GPUs. While Meta has to pay off its loan if it terminates the leases early, that will still leave its investors “with an empty building and no cash flow,” he says. “And then they need to find a new tenant for a huge data center, and good luck with that.”

Meanwhile, Meta is doubling down on its bet. In July, the company announced it was expanding the data center to five gigawatts of compute capacity. The total price tag is now $50 billion (so far, Meta hasn’t said whether Blue Owl will be involved in financing the expansion). Meanwhile, Entergy is now planning to build seven more gas-fired power plants, bringing the total capacity of the facilities to around 7.5  gigawatts—some six times the amount of electricity used by New Orleans.

SCOTT BALL/THE NEW YORK TIMES VIA REDUX PICTURES

If the complex financing is a puzzle to many investors and even financial experts, it is even more baffling to those directly affected by the construction of the data center. The main worry concerns how Entergy’s spending on the natural-gas power plants will affect electricity prices, and who will be left paying the bill for the power if Meta walks away.

Entergy says it has a 20-year guarantee from Meta that the company will purchase electricity over that period to cover the costs of the power plants and related infrastructure.  But there are skeptics, especially given how fast the fortunes of the AI industry are changing. “In four years, is Mark Zuckerberg still going to be interested in this? Or is he going to throw in the towel?” asks Paul Arbaje, a senior analyst at the Union of Concerned Scientists, which has been advocating, largely unsuccessfully, for the Louisiana Public Service Commission to provide more transparency around the data center and its financing.

Even if the 20-year deal holds, consumer advocates are worried that Meta or its partners won’t fully cover all the costs, including those associated with operating and maintaining the power plants—and those additional costs that could be passed on to residential ratepayers. What’s more, says Logan Burke, the executive director of the Alliance for Affordable Energy, if Meta doesn’t end up needing as much power as Entergy planned (these projections are not public), consumers could be left paying for the surplus produced by the plants.

And if Meta terminates its leases early? “It gets complicated very quickly,” says Burke, who questions whether the shifting roster of financial entities will honor existing agreements. “That everybody is going to do what they’re saying they’re going to do over the next 20 years is just hard to believe.”

For UCS’s Arbaje the bottom line is this: “They’re making huge bets that these data centers will be worth it. Bet with your own money, not with ratepayer money.”

After the bubble

Predicting when the AI investment bubble will burst is a fool’s errand. But there is little doubt a day of reckoning is coming, given the irrational exuberance that has overtaken the hyperscalers and their investors. Of course, you might argue that this time is different, and that the rules of accounting and lessons of economic history don’t apply—that AI is too transformative. Maybe, but don’t count on it.

“History tells us that at some point you get a retrenchment, and it’s just a question of when and how severe,” says Sloan’s Gensler. It could be that today’s $750 billion spending rate “goes flat” or decreases next year. Or, he suggests, “we’re now in 2028 or 2029, and then all of sudden they’re retrenching because they’ve got enough capacity.” But, he adds, “you can be pretty assured there’ll be a retrenchment.” 

Though a so-called retrenchment might be inevitable, it’s worth keeping in mind that the fates of the financial bubble and the underlying AI technology revolution could be very different. Already, some Silicon Valley insiders are rooting for a crash; in a recent blog post the longtime venture capitalist Vijay Pande wrote that “the coming crash would be the best thing that happens to this technology.” The argument makes some sense. A crash could make AI investments more rational, calm the impulse to build billion-dollar data centers on every vacant field that CEOs fly over, and refocus investors on how to use the technology to create sustainable value.

But we should probably be careful what we wish for. After the bursting of the dot-com bubble at the beginning of the 2000s, hundreds of thousands lost their jobs, large and small companies alike went bankrupt, the economy of Silicon Valley and San Francisco was decimated (at least for a while), and the shocks sent the US into a mild recession in 2001. For the financial community and many tech workers, it was no fun.

Even more devastating for the economy and the average American was the great recession that began in late 2007. Comparing the financial engineering leading up to it and the methods deployed by hyperscalers today is sobering. So-called special purpose vehicles (SPVs) are back! If Columbia’s Van Nieuwerburgh is right about the dangers of letting investments from the hyperscalers get entangled throughout the economy, the fallout could be severe.

But technologies survived and even prospered in the aftermath of both downturns. The early 2000s, even in the face of the dot-com fiasco, were a time of great innovation and tech optimism. The froth came off the spending on silly technologies, helping to focus investments on more promising ones. It’s no coincidence that each of the hyperscalers rose out of the ashes of the crash or started up shortly after. The fiber-optic infrastructure built during the feverish telecom bubble that ran parallel to the dot-com one is still the backbone of much of today’s communication infrastructure; we wouldn’t have Facebook or Amazon or Google without it.

This time, however, we’re facing a unique risk: The huge financial investments by the hyperscalers have ensnared the future of AI itself with the fortunes of the massive data centers spreading around the country. The logic is founded on a deeply held belief about the power of scaling in AI; the bigger you build it, the smarter it gets. That might be true, but it’s unproven and a risky bet.

There are already plenty of red flags, from strong public opposition to the construction of new data centers to the competitive threat from cheaper, good-enough AI models to the rapid improvement of small, local AI models. None of these trends point toward a future dominated by frontier models housed in massive, billion-dollar data centers.

The financial bubble around the colossal spending by the hyperscalers will likely burst eventually—or maybe soon. It might be financially painful, but we’ll survive. Wall Street will survive. AI itself will survive, though it may look different and lose some of today’s hubris. The financial fate and future utility of the massive data centers fueled by trillions of dollars of spending, on the other hand, are far less certain.