The Brief

Perhaps nobody embodies artificial intelligence mania quite like Jensen Huang, the chief executive of chip behemoth Nvidia, which has seen its value spike 300% in the last two years.

A frothy time for Huang, to be sure, which makes it all the more understandable why his first statement to investors on a recent earnings call was an attempt to deflate bubble fears.

"There's been a lot of talk about an AI bubble," he told shareholders. "From our vantage point, we see something very different."

Take in the AI bubble discourse and something becomes clear: Those who have the most to gain from artificial intelligence spending never slowing are proclaiming that critics who fret about an over-hyped investment frenzy have it all wrong.

"I don't think this is the beginning of a bust cycle," White House AI czar and venture capitalist David Sacks said on his podcast All-In. "I think that we're in a boom. We're in an investment super-cycle."

White House AI adviser David Sacks speaks onstage during The Bitcoin Conference at The Venetian Las Vegas in January.

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"The idea that we're going to have a demand problem five years from now, to me, seems quite absurd," said prominent Silicon Valley investor Ben Horowitz, adding: "if you look at demand and supply and what's going on and multiples against growth, it doesn't look like a bubble at all to me."

Appearing on CNBC, JPMorgan Chase executive Mary Callahan Erdoes said calling the amount of money rushing into AI right now a bubble is "a crazy concept," declaring that "we are on the precipice of a major, major revolution in a way that companies operate."

Yet a look under the hood of what's really going on right now in the AI industry is enough to deliver serious doubt, said Paul Kedrosky, a venture capitalist who is now a research fellow at MIT's Institute for the Digital Economy.

He said there is a startling amount of capital pouring into a "revolution" that remains mostly speculative.

"The technology is very useful, but the pace at which it is improving has more or less ground to a halt," Kedrosky said. "So the notion that the revolution continues with the same drum beat playing for the next five years is sadly mistaken."

The huge infusion of cash

The gusher of money is rushing in at a rate that is stunning to financial experts.

Take OpenAI, the ChatGPT maker that set off the AI race in late 2022. Its CEO Sam Altman has said the company is making $20 billion in revenue a year, and it plans to spend $1.4 trillion on data centers over the next eight years. That growth, of course, would rely on ever-ballooning sales from more and more people and businesses purchasing its AI services.

There is reason to be skeptical. A growing body of research indicates most firms are not seeing chatbots affect their bottom lines, and just 3% of people pay for AI, according to one analysis.

"These models are being hyped up, and we're investing more than we should," said Daron Acemoglu, an economist at MIT, who was awarded the 2024 Nobel Memorial Prize in Economic Sciences.

"I have no doubt that there will be AI technologies that will come out in the next ten years that will add real value and add to productivity, but much of what we hear from the industry now is exaggeration," he said.

Nonetheless, Amazon, Google, Meta and Microsoft are set to collectively sink around $400 billion on AI this year, mostly for funding data centers. Some of the companies are set to devote about 50% of their current cash flow to data center construction.

Or to put it another way: every iPhone user on earth would have to pay more than $250 to pay for that amount of spending. "That's not going to happen," Kedrosky said.

To avoid burning up too much of its cash on hand, big Silicon Valley companies, like Meta and Oracle, are tapping private equity and debt to finance the industry's data center building spree.

Paving the AI future with debt and other risky financing

One assessment, from Goldman Sachs analysts, found that hyperscaler companies — tech firms that have massive cloud and computing capacities — have taken on $121 billion in debt over the past year, a more than 300% uptick from the industry's typical debt load.

Analyst Gil Luria of the D.A. Davidson investment firm, who has been tracking Big Tech's data center boom, said some of the financial maneuvers Silicon Valley is making are structured to keep the appearance of debt off of balance sheets, using what's known as "special purpose vehicles."

An aerial view of a 33 megawatt data center with closed-loop cooling system in Vernon, California.

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The tech firm makes an investment in the data center, outside investors put up most of the cash, then the special purpose vehicle borrows money to buy the chips that are inside the data centers. The tech company gets the benefit of the increased computing capacity but it doesn't weigh down the company's balance sheet with debt.

For example, a special purpose vehicle was recently funded by Wall Street firm Blue Owl Capital and Meta for a data center in Louisiana.

The design of the deal is complicated but it goes something like this: Blue Owl took out a loan for $27 billion for the data center. That debt is backed up by Meta's payments for leasing the facility. Meta essentially has a mortgage on the data center. Meta owns 20% of the entity but gets all of the computing power the data center generates. Because of the financial structure of the deal, the $27 billion loan never shows up on Meta's balance sheet. If the AI bubble bursts and the data center goes dark, Meta will be on the hook to make a multi-billion-dollar payment to Blue Owl for the value of the data center.

Such financial arrangements, according to Luria, have something of a checkered past.

"The term special purpose vehicle came to consciousness about 25 years ago with a little company called Enron," said Luria, referring to the energy company that collapsed in 2001. "What's different now is companies are not hiding it. But having said that, it's not something we should be leaning on to build our future."

Enormous spending hinging on returns that could be a fantasy

Silicon Valley is taking on all this new debt with the assumption that massive new revenues from AI will cover the tab. But again, there is reason for doubt.

Morgan Stanley analysts estimate that Big Tech companies will dish out about $3 trillion on AI infrastructure through 2028, with their own cash flows covering only half of that.

"If the market for artificial intelligence were even to steady in its growth, pretty quickly we will have over-built capacity, and the debt will be worthless, and the financial institutions will lose money," Luria said.

Twenty-five years ago, the original dot-com bubble burst after, among other factors, debt financing built out fiber-optic cables for a future that had not yet arrived, said Luria, a lesson, it appears, tech companies are not worried about repeating.

"If we get to the point after spending hundreds of billions of dollars on data centers that we don't need a few years from now, then we're talking about another financial crisis," he said.

Circular deals raise even more concern

Another aspect of the over-heated AI landscape that is raising eyebrows is the circular nature of investments.

Take a recent $100 billion deal between Nvidia and OpenAI.

Nvidia will pump that amount into OpenAI to bankroll data centers. OpenAI will then fill those facilities with Nvidia's chips. Some analysts say this structure, where Nvidia is essentially subsidizing one of its biggest customers, artificially inflates actual demand for AI.

"The idea is I'm Nvidia and I want OpenAI to buy more of my chips, so I give them money to do it," Kedrosky said. "It's fairly common at a small scale, but it's unusual to see it in the tens and hundreds of billions of dollars," noting that the last time it was prevalent was during the dot-com bubble.

Open AI CEO Sam Altman speaks during Snowflake Summit 2025 at Moscone Center in June.

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Lesser-known companies are getting in on the action, too.

CoreWeave, once a crypto mining startup, pivoted to data center building to ride the AI boom. Major AI companies are turning to CoreWeave to train and run their AI models.

OpenAI has entered deals with CoreWeave worth tens of billions of dollars in which CoreWeave's chip capacity in data centers is rented out to OpenAI in exchange for stock in CoreWeave, and OpenAI, in turn, could use that stock to pay its CoreWeave renting fees.

Nvidia, meanwhile, which also owns part of CoreWeave, has a deal guaranteeing that Nvidia will gobble up any unused data center capacity through 2032.

"The danger," said the MIT economist Acemoglu,"is that these kinds of deals eventually reveal a house of cards."

Some high profile investors see bubble-popping on the horizon

Some influential investors are showing signs of bubble jitters.

Tech billionaire Peter Thiel sold off his entire stake in Nvidia worth around $100 million earlier this month. That came after SoftBank sold a nearly $6 billion stake in Nvidia.

And in recent weeks, AI bubble pessimists have rallied around Michael Burry, the hedge-fund investor who made hundreds of millions of dollars betting against the housing market in 2008. He was the subject of the 2015 film The Big Short. Since then, though, he's had a mixed reputation for market predictions, having warned about imminent collapses that never came to pass.

For what it's worth, Burry is now betting against Nvidia, accusing the AI industry of hiding behind a bunch of fancy accounting tricks. He's homed in the circular deals between companies.

"True end demand is ridiculously small. Almost all customers are funded by their dealers," Burry wrote on X. He later wrote: "OpenAI is the linchpin here. Can anyone name their auditor?"

As tech companies sink billions into data centers, some executives themselves are freely admitting there looks to be some over exuberance.

OpenAI CEO Sam Altman told reporters in August: "Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes."

And Google chief executive Sundar Pichai told the BBC recently that "there are elements of irrationality" in the AI market right now.

Asked how Google would fare if the bubble burst, Pichai responded: "I think no company is going to be immune, including us."

Copyright 2025 NPR

That ocean breeze is just not cutting it in schools in Torrance and Long Beach as Southern California reels from a heat wave.

Parents have taken to social media, created petitions and are proposing a bond measure in order to address the sweltering classrooms as temperatures hit triple digits in some areas.

Only 25% of Torrance Unified classrooms have air conditioning, according to a district spokesperson. And while 90% of Long Beach Unified schools have air conditioning, the schools without air conditioning have to bear this heat spell until the end of 2027 when new air conditioning will be in all classrooms.

What are schools doing to beat the heat?

In Long Beach, the district says there are portable fans in classrooms without AC and the district has installed heat-blocking window covers.

"The things that we do immediately and have been doing for several years, hydration stations,” Keith Butler, the deputy superintendent at TUSD, told the school board early this week. “So our nutrition services freezes blocks of ice, puts them into containers with water, and students are — and staff are able to rotate through and at least get ice water.”

There is also a classroom rotation system so everyone gets a turn in cooling zones, he said.

Can schools close on extreme heat days?

Eric Mitchell, a spokesperson for LBUSD, told LAist, “The District will not close schools because of extreme weather unless the City of Long Beach Public Health Department or a state-authorized emergency response agency directs it.”

Baillie echoed his words adding that a state-declared emergency allows schools to close temporarily without needing to make up teaching time. School funding is dependent on attendance and instructional time.

If a local emergency is declared, school districts, she said, must consult with labor unions to adjust the school schedule to either extend the school year or move to a student-free professional development day.

“Our district is actively discussing creating union-approved ‘weather days’ that would provide a mechanism to adjust the schedule,” Baillie said. “Thresholds would be part of that discussion and might focus on when national weather alerts elevate a heat advisory to an extreme heat event, as they did this week.”

So how can Torrance get ACs in the classroom?

School districts like Torrance pay for facility upgrades like new ACs through district issued bond measures. A school district takes a loan and the people in that city pay back that loan through an increase in their property taxes. That is because there is no specific state allocation of funding for major upgrades or construction. Most of the money schools get from the state is spent on instruction and other student services. There have been some occasional grant programs, like CalShape, but no ongoing source of funding.

This week, a petition to get TUSD to place a bond measure on the ballot to fund ACs has already garnered over 1500 signatures.

But, Baillie said, “Third-party polling completed earlier this year showed a willingness to vote for additional future bonds; however, when specifically asked about the costs of specific bonds to fund the $520 million needed to upgrade the electrical systems and install AC at all 34 campuses, polling showed there would not be enough support (bonds require 55% +1 of voters in an election) to pass a bond for AC.”

And so the bond measure was not placed on the upcoming ballot.

Butler, the deputy superintendent, explained during this week’s school board meeting that parents cannot simply donate an AC unit.

“ One [reason] is it's not super effective to have a typical window unit from a home that would be trying to cool a 960 sq. ft. classroom with 27 students and a teacher, maybe an instructional aide,” he said. “But the bigger issue is the ones that are large enough to really do that, the room has to have a large electrical load, and our electrical system within our buildings where most of them were built in the 1960s, it's just not meant to handle what it does.”

LAist reporter Mariana Dale contributed to this article. 

The Orange County District Attorney’s Office is hosting a buyback event Sunday where people can exchange their e-bikes and e-motorcycles for up to $1,000 in gift cards. The goal is to reduce the number of illegal bikes on the road, and give parents an incentive to get dangerous vehicles out of kids’ hands.

“These vehicles are not child’s play, and the consequences are incredibly dangerous and increasingly deadly,” DA Todd Spitzer said in a news release announcing the event.

Communities in Orange County have been grappling with a surge in e-bikes and e-motos on the road, including among young kids, and an accompanying increase in serious crashes.

“Our area has pretty much the highest concentration of e-bike injuries and e-bike accidents in the country,” said Dr. Tetsuya Takeuchi, the trauma medical director at Providence Mission Hospital in Mission Viejo.

Takeuchi said  just over 70% of the children treated at the hospital for e-bike injuries had some level of head injury, “from a simple concussion to devastating brain damage, brain bleed and skull fracture."

A lot of those injuries are among teenagers not wearing helmets, he said. Plus, many e-bikes on the market are too heavy and fast for children to control, Takeuchi said.

Besides safety concerns, tensions have flared with other drivers, pedestrians, and neighbors in areas with heavy concentrations of e-bikes.

Newport-Mesa Unified School District became one of the first districts in the country this year to restrict e-bikes to high school campuses only. District leaders say the policy is working to disincentivize young students from riding e-bikes to school. But at one middle school, students with e-bikes have opted to ride them anyway, parking in the surrounding neighborhood and raising the ire of homeowners.

The DA’s approach

The DA’s office has started to target parents who allow their children to ride e-bikes and e-motorcycles that have been illegally modified for high speeds, sometimes with deadly consequences. In April, the district attorney filed child endangerment charges against a mother from Aliso Viejo after her 14-year-old son struck and killed an 81-year-old man while doing wheelies in the street in Lake Forest. The boy was riding an e-motorcycle souped up to reach 60 mph.

Details of the buyback program

The e-bike and e-motorcycle buyback program is part of the DA’s plan to address safety concerns with e-bikes. Local police departments, hospitals and the California Office of Traffic Safety will also be onsite with information booths.

People can bring in functioning or non-functioning e-bikes, e-motorcycles, e-scooters and pocket bikes and exchange them for gift cards worth up to $1,000 — while supplies last.

The event takes place from 10 a.m. to 1 p.m., Sunday, Sept. 13, at Angel Stadium in Anaheim.

An appeals court issued a ruling Friday that strikes down a federal government effort to block a lower court’s order requiring the construction of 2,550 new housing units on the Veterans Affairs campus in West Los Angeles.

The long-running case, brought forward by disabled veterans struggling with homelessness in the L.A. area, has centered on the use of the sprawling 400-acre VA campus.

U.S. District Judge David O. Carter had previously scrutinized leases for the private Brentwood School’s athletic facilities, a parking lot company, an oil drilling enterprise and UCLA’s baseball stadium.

Ruling that the campus was meant to aid veterans, Carter ordered the VA to not renew the leases and quickly build 750 units of temporary housing and 1,800 units of permanent housing.

But Carter’s September 2024 order has been on hold ever since the defendants asked the 9th Circuit Court of Appeals to review his decision.

Case returns to lower court

On Friday, more than two-thirds of the court’s 29 judges ruled against the VA’s petition for a rehearing.

“It's a historic day for veterans,” said Mark Rosenbaum, an attorney with Public Counsel representing the plaintiffs.

“The government has been fighting their veterans, who went to fight on behalf of the nation,” he added. “They've been fighting them like they are the enemy. They went to the district court to fight. They lost.”

Rosenbaum said he’s pleased to see the case return to Carter’s courtroom after a long appeals process. Carter, himself a Marine Corps veteran who served in the Vietnam War, took an active role in pushing the VA to address a homelessness crisis that has thousands of former service members experiencing homelessness on any given night in L.A. County.

Could the VA pursue further appeals? 

Carter has also ordered the VA to stop using veterans' disability payment benefits as a reason to make them ineligible for supportive housing programs due to income restrictions.

But Rob Reynolds, an Iraq War veteran who advocates for L.A.’s veteran community, said the federal government’s attempts to win an appeal could continue.

“The government can still appeal this to the U.S. Supreme Court,” Reynolds said.

When veterans involved in the case first heard today’s news on the 9th Circuit ruling, he said they immediately asked about the potential for further appeals.

“All of us are really hoping that the government stops this fight, and that we can get housing built for our veterans and end this madness once and for all,” Reynolds said.

A spokesperson for the VA declined to comment on the ruling, saying the department does not discuss pending litigation.

Jenny Yang, a comedian from L.A., has been traveling across the country turning immigrant grocery stores into comedy hubs. Now she’s back in L.A. getting ready to start a mini-residency in Highland Park, tape her first one-hour special and share moments from the tour.

Yang kicked off her Good Egg Immigrant Grocery Store Standup Comedy Tour in June in L.A., then took it to 15 cities across the country. She told LAist the decision came as a way to cope with the grief from her dad’s death, 10 failed in vitro fertilization treatments between 2020 and 2025 and seeing the news of Immigration and Customs Enforcement raids spread across the country.

She said the idea to tour grocery stores was a way to reclaim those spaces, after immigration enforcement left many afraid to go out and do simple tasks like buying groceries.

“If we cannot laugh in front of a wall of instant ramen around our bok choy," Yang said, "then what is the American dream for?"

Her routine wove in stories about her fertility struggles and the challenges of having to be a “good egg” growing up as the child of immigrant parents from Taiwan. Her hope for the tour was to connect with people, to make jokes and help people feel lighter after.

The tour proceeds went to local nonprofits serving immigrant communities, and Yang said those organizations helped recruit the grocery stores. She said some stores said no at first — they felt overwhelmed by ICE activity in their city, had lost staff or worried about drawing attention.

“That's part of the story of the tour is it's one thing to want to imagine this beautiful world where you can tell jokes inside of immigrant grocery stores," Yang said. "It's another thing to know what those obstacles are, and I think that's still very telling for where we are as a country.”

One moment stood out to Yang: performing at Shuang Hur Supermarket in Minneapolis. It’s near the memorial for Alex Pretti, the nurse that a U.S. Border Patrol agent shot and killed in January as federal agents carried out immigration enforcement in the city.

“I was able to talk to Henry, the owner who’s a Chinese American uncle. [He] was so proud of being able to help his regular patrons, who for the most part even though it was an Asian centered grocery store, were majority Latino,” Yang said. “I was able to bear witness to their resilience as a community, what they did to take care of each other.”

Now she’s back in L.A. and is doing a mini-residency at the Outside In Theater at 5317 York Blvd. in Highland Park. Her first show is 6 p.m., Saturday, Sept. 12, followed by shows on Sept. 19 and 26 at the same time. Tickets are pay-what-you-can, and you can find them at Outside In's website.

In February 2027, Yang will be taping her first one-hour special at Rancho Meat Market #1 in Lincoln Heights. She describes it as a love letter to Los Angeles that’s endured so much, from the ICE raids to the January fires.

You can follow Jenny Yang’s work here.