Every major technological revolution has come with a bubble: railroads, electricity, dot-com. Is it AI’s turn? With investments skyrocketing and market valuations reaching the trillions, the stakes are enormous. But are we witnessing a genuine revolution—or the early stages of a spectacular crash? Princeton professor Arvind Narayanan joins Luigi Zingales and Bethany McLean to explain why he believes AI’s transformative impact is overstated. Drawing on his book AI Snake Oil, co-authored with Sayash Kapoor, Narayanan argues that capitalism’s incentives can distort technological progress, pushing hype faster than reality can deliver. They examine how deregulation, geopolitical competition, and private control over data shape the trajectory of AI’s development. They also explore what could happen if the bubble bursts: massive market shocks, exposed structural weaknesses in the economy, and a wave of painful restructuring that could echo the dot-com crash—but on a far larger scale. It’s a conversation that cuts through the hype and asks what’s at stake when an entire economy bets on one technology.