In the shimmering haze of technological hype, artificial intelligence stands as both a mesmerizing spectacle and a precarious foundation for economic growth. A recent article in The Atlantic dubs AI a “mass-delusion event,” where users and admirers grapple with a sense of unreality, feeling as though they’re “losing it” amid promises of superintelligence and revolutionary change. Meanwhile, a sobering analysis reveals that without AI-driven investments, U.S. capital expenditures (capex) would be in a deep slump, with data centers and infrastructure propping up GDP figures that mask a narrower, more vulnerable recovery. These two phenomena—psychological delusion and economic dependency—are inextricably linked, much like a Las Vegas magic show where the audience’s awe sustains the illusion, even as the tricks drain resources and obscure underlying frailties.
The Mass-Delusion of AI: A Psychological Spectacle
Imagine attending a variety show where water pours from empty newspapers and pigeons emerge from top hats. This is how many perceive the AI boom: a series of dazzling tricks that captivate but ultimately unsettle. As The Atlantic argues, generative AI has induced a collective psychosis, with its boosters—Silicon Valley executives and tech evangelists—hyping an imminent “computational big bang” that could lead to artificial general intelligence (AGI) or even Dyson spheres encircling the sun. Yet, three years into this era, the reality is far more mundane: AI tools that are “good enough” for rote tasks but prone to hallucinations, ethical lapses, and outright bizarre applications.
Examples abound that evoke a sense of losing one’s grip on reality. Consider the chatbot interview recreating Joaquin Oliver, a teenager killed in the Parkland shooting—viewers reacted with unease, confessing, “I feel like I’m losing my mind watching it” or “This feels so strange.” Subreddits like r/MyBoyfriendIsAI highlight users forming romantic attachments to algorithms, while others face involuntary commitments after chatbot-induced breakdowns. AI’s darker tricks include “nudify” apps generating revenge porn and fake studies influencing drug approvals, flooding digital spaces with synthetic content that pollutes the internet and erodes trust.
This delusion extends beyond individuals to society at large. CEOs warn of massive job displacements—Anthropic’s leader predicts AI could eliminate half of entry-level white-collar roles—fostering anxiety and a “cognitive debt” from overreliance on these tools. It’s akin to hypnosis: the audience buys into the magic, accepting a future where AI reshapes culture, economy, and cognition, even as it threatens education, the environment, and human ingenuity.
The Economic Treadmill: AI as the Sole Engine of Growth
Beneath the psychological fog lies a tangible economic reality—or perhaps another layer of illusion. Without AI, the U.S. economy would resemble a vast prairie stripped of its hum: server farms and data centers are the silicon creatures keeping growth alive. In Q1 2025, GDP contracted by 0.5%, but stripping out data-center construction reveals a stark -1.5%. Q2’s rebound to +3.0% looks resilient, yet AI contributed about half a percentage point, leaving the first half of the year at a meager 1% without it.
Since 2019, investment in AI-sensitive sectors has surged 53%, while non-AI areas languish at a flat 0.3%. This isn’t broad-based dynamism; it’s a treadmill powered by a handful of apex predators—major AI labs dictating national investment through a dozen massive training runs annually. On the ground, projects like Foxconn and SoftBank’s repurposed Ohio factory for the $500 billion Stargate initiative underscore the frenzy, backed by political urgency and promises of revival.
Winners in this high-stakes game include utilities (with data centers projected to consume 6% of U.S. electricity by 2026), chipmakers like NVIDIA and TSMC, cloud giants such as Microsoft and AWS, and AI-linked investors reaping harvest-season earnings. Losers, however, paint a grimmer picture: non-tech industries starved of capital, residential customers facing higher bills, water-stressed regions strained by cooling demands, small businesses overshadowed in funding chases, and environmental advocates decrying carbon-intensive buildouts clashing with net-zero goals.
Bridging the Phenomena: Delusion Drives Dependency
Here’s where the connection crystallizes: the mass-delusion of AI’s magical potential fuels the very economic boom that sustains it, creating a feedback loop of hype and investment. The Atlantic‘s portrayal of AI as a “monkey’s paw”—granting wishes at a cost—mirrors the economic analysis: data centers are real, the dollars flowing, but the growth is narrow, dependent on infrastructure that hasn’t yet translated to widespread adoption or productivity gains.
Admirers, entranced like variety-show spectators, pour billions into AI (Big Tech alone exceeding $100 billion in IT infrastructure), believing in transformative payoffs. Yet, this mirrors the delusion: society reorients around unproven promises, sacrificing broader economic health, environmental stability, and psychological well-being. If the hype falters—if AGI remains elusive or tools prove merely “good enough”—the treadmill could halt, exposing the slump beneath. It’s not that AI is a complete mirage; the server farms hum with authenticity. But the grand illusion lies in mistaking concentrated capex for holistic prosperity, much like applauding a magician’s tricks while ignoring the emptying pockets.
Conclusion: Awakening from the Hype
In linking these phenomena, we see AI not as thunder or insects in the prairie wind, but as a engineered hum that drowns out economic vulnerabilities. The mass-delusion event breeds overinvestment, turning a potential tool into a crutch for a sluggish economy. For true resilience, the rest of the economy must catch up—through consumer adoption, diversified innovation, and grounded expectations—lest we discover, when the show ends, just how much we’ve bet on smoke and mirrors. As The Atlantic warns, this could be a tragedy: a future bloodless and hastily conceived, where we’ve outsourced our progress to algorithms that may never truly evolve. The question isn’t whether AI is real, but whether our enchantment with it blinds us to the costs.