Why today’s AI surge looks more like a durable economic shift than a speculative bubble.
9 February 2026
Artificial intelligence moved into the economic mainstream in 2025, as investment, profits and productivity gains began to materialise at scale. A new analysis from CBA’s Global Economic & Markets Research team finds that this shift is set to continue through 2026, even as debate grows about whether the AI boom can be sustained.
Concerns about an “AI bubble” are understandable. Equity valuations are stretched, market concentration is high, and expectations for future earnings are demanding. History shows, however, that technology booms do not always end in dramatic crashes.
CBA’s analysis outlines several possible outcomes, ranging from a benign period of technical market corrections to a more disruptive boom-bust scenario. Crucially, the most severe outcomes seen during the dot-com era or the Global Financial Crisis appear less likely today.
That is because today’s AI leaders are already profitable, generate strong cash flows and rely far less on debt than past tech cycles. Unlike earlier booms, AI investment is largely being funded from operating cash flows rather than cheap credit.
At the centre of the AI surge are global hyperscalers, which are investing heavily in data centres, cloud infrastructure and specialised chips.
US hyperscaler capital expenditure is on track to exceed US$500 billion annually from this year. While spending is accelerating rapidly, profitability is rising too, with margins improving across much of the sector.
“The bottom line is that the AI trade is not being supported by hype alone,” CBA Chief Economist Luke Yeaman said. “Profitability has remained strong through the capital-intensive buildout. That does not eliminate downside, but it reduces the probability of a sudden, sentiment-driven collapse.”
Beyond financial markets, AI is already lifting real economic activity. In the US, AI-related investment has become a key driver of GDP growth, contributing materially to recent economic resilience.
Looking ahead, CBA economists are optimistic that AI will drive a major boost to global productivity in the order of 0.8-1.0 percentage points over time in advanced economies, as adoption deepens. Over time, this could lift trend economic growth, improve living standards and support stronger public finances.
The gains will not be evenly distributed. Countries that adopt AI faster, invest in skills and modernise business practices are likely to benefit the most.
Australia is expected to share in the AI investment boom, particularly through data centre construction. CBA economists estimate Australia’s data centre pipeline could exceed 6 gigawatts of capacity by 2030, potentially more than triple current levels.
Major projects remain concentrated in Sydney and Melbourne, but investment is spreading to regional centres. This pipeline is expected to support business investment and GDP growth, although regulatory delays, planning approvals and energy constraints remain key risks.
Yet despite strong infrastructure investment, Australia is unlikely to be at the global frontier of AI adoption. Structural challenges, including lower competitive pressure, slower diffusion of new technologies, and uneven uptake among small and medium-sized businesses, may limit near-term productivity gains.
“Economic reforms that materially improve competition and dynamism across the economy, especially in the care economy, the public sector and amongst small to mid-sized businesses are crucial if Australia is to keep up with the pack and not risk falling behind the AI-leaders over coming years,” Yeaman said.
While AI will change the nature of work, CBA economists see little evidence to support fears of widespread technological unemployment.
Most roles are expected to be augmented rather than replaced, particularly in professional services, administration and customer-facing industries. Over time, new jobs are also likely to be created as AI enables new products, services and business models.
Looking further ahead, advances in robotics combined with AI could have a more disruptive effect on labour markets in the 2030s, especially in physical and manual tasks. But for now, the impact is expected to be gradual.
CBA’s research indicates fears of an AI bubble aren’t irrational, but that they may be overstated. While valuations are elevated and risks remain, today’s AI boom is underpinned by real investment, strong profitability and genuine economic benefits.
AI is unlikely to deliver a smooth ride for markets. Rather than a dramatic bust, the more probable path is ongoing growth punctuated by periodic corrections, with AI emerging as a defining force shaping global growth in the years ahead.
“In this new, more challenging, economic era, AI stands out as the potential saviour. 2025 marked the transition from AI expectation to AI impact, helping the global economy shrug off the tariff hit. We expect this to continue in 2026,” Yeaman said.
Read the full paper from Luke Yeaman, Samara Hammoud and Lucinda Jerogin: AI: Boom, Bubble or both?
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The information presented is an extract of a Global Economic and Markets Research (GEMR) Economic Insights report. GEMR is a business unit of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945.
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