“I think bubbles are an essential part of how the world works. They are an important part. They're even a valuable part. We want people to occasionally take leave of their senses and chuck money at stuff, to hope and dream… But I do think that bubbles, when they burst, they tend to burst in more violent, nasty ways when they are driven primarily by credit.”
Masters in Business · October 2026
Barry Ritholtz asked Wigglesworth why he went from relaxed to worried about an AI bubble. His answer: the dot-com crash was mostly an equity event, but AI spending is increasingly funded by credit and off-balance-sheet liabilities.
Transcript
…like kind of an evil Santa Claus, like very intense eyes, bigger, big, bushy white beard. I think he was fascinating. And also maybe because he's now so synonymous with the crash of 1873, his genuinely valuable role that he played in America. And I think maybe deserves recognition as well, I guess.
So I'm legally obligated to ask a question about AI these days. You were quoted saying you were profoundly relaxed about the possibility of an AI bubble, but then piling on all of this debt changes things. So what changed your mind?
Well, I'm profoundly relaxed about bubbles just because I'm not an efficient market zealot, but I just, I can't spot them, certainly. I don't really believe anybody can. And in fact, I think bubbles are an essential part of how the world works. They are an important part. They're even a valuable part. We want people to occasionally take leave of their senses and chuck money at stuff, to hope and dream, rather than just kind of be a boring journalist who always thinks everything's going to go badly. That is how quite often big leaps of progress happen. But I do think that bubbles, when they burst, they tend to burst in more violent, nasty ways when they are driven primarily by credit. So we talked about the dot-com bubble as a classic example that was primarily in the equity landscape. Didn't…
You remind me, there's a wonderful book that if you haven't read, you should absolutely put in the top of your list, which is it's by Dan Gross, Pop, Why Bubbles Are Great for the Economy. My favorite chapter is all of the fiber that was laid. Rollable Crossing, Metro Media Fiber, $1,000 a mile.…
I don't know. I don't know whether it's misallocated. I mean, if it is, if it's going to cure cancer, bring peace to the Middle East and make us an interplanetary species, maybe this isn't misallocation. I don't know. And I think we all have to be humble given what's going on about how much we do…
not AI. You don't need. That's not. Well, basically,
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