The Rundown – Deep Dive: How the AI Boom Created a K-Shaped Economy

Host: Zaid Admani
Date: November 1, 2025

Overview

In this weekend deep dive, host Zaid Admani explores the profound impact artificial intelligence (AI) is having on the US economy, resulting in a “K-shaped” recovery. He examines who is winning and who is losing amid the rapid AI transformation—spotlighting tech giants and chipmakers at the top, with young workers, traditional sectors, and middle-to-lower-income consumers struggling at the bottom. Zaid also questions whether this divide is a temporary transition or a permanent fixture, sharing optimism for long-term adaptation but acknowledging real present-day risks.

Key Discussion Points & Insights

1. The Winners: Big Tech, Chip Makers, and Power Providers

[00:25 – 05:30]

• AI “Top Arm” of the K: Dominated by hyperscaler cloud giants—Google, Amazon, Microsoft, Meta—with massive spending on AI infrastructure, hoping it translates into higher future revenue.
  • Google hit $100B in quarterly sales, boosted by 35% year-over-year cloud growth, and raised capex to $92B for 2025.
  • Amazon reported AWS’s largest growth in three years, with $125B in expected AI capex.
  • Microsoft Azure grew 40% and is targeting $80B in spending for 2025.
  • Meta will spend $70B+ on AI, but faces investor anxiety due to less obvious revenue returns.

“Collectively, big tech is spending 60% of their operating cash flow to build this AI infrastructure... That means that these big tech giants will end up capturing all the upside from AI if demand... materializes.”
— Zaid Admani [03:20]

• The Sellers: Chip and energy companies reaping the greatest immediate rewards from hyperscaler capex.
  • Nvidia becomes the “undisputed backbone” of the AI economy, hitting a $5T market cap.
  • AMD is booming as the second option for AI chips.
  • TSMC and ASML are crucial for advanced chip manufacturing.
  • Power and memory companies like Micron supply the raw energy and memory needed for AI data center growth.
  • AI-related stocks account for 75% of S&P 500 returns and 80% of earnings growth since ChatGPT’s launch (JPMorgan).

“If you’re an investor or an employee of one of these companies, you’ve likely been a winner in the K-shaped AI economy that we live in today.”
— Zaid Admani [06:10]

• OpenAI as outlier:
  • ChatGPT reaches 800M weekly active users.
  • Projected revenue: $13B/year today, targeting $100B by 2028.
  • OpenAI is planning trillions in AI infrastructure spend; aiming for a $1T+ IPO valuation.

2. The Losers: Labor Market Struggles and Rising Inequality

[06:30 – 09:15]

• Younger workers hit hardest:

  • Entry-level tech hires are down 25% YoY, 50% below 2019 levels.
  • Wage growth for young workers has stalled; youth unemployment is at 10% (double national avg).
  • Job openings across the economy have dropped 30% since ChatGPT’s launch, despite S&P 500 gains.
  • Mass layoffs in headlines: UPS (48,000 jobs cut), Amazon (14,000 corporate), Microsoft (15,000), reflecting both automation and efficiency moves.

• Context from Expert:

  • [07:30] Harvard economist Jason Furman (previewing a full interview):

    “There were all these layoff stories... didn’t show up in the aggregate job data... The surprising thing in the US labor market right now is how few layoffs there are, not how many.”
    — Jason Furman [07:30]

  • National unemployment: 4.3% in August; Fed forecasts 4.35% for October.

• Long-term AI risks:

  • World Economic Forum: 60% of jobs in developed economies will be AI-impacted; 39% of current skills obsolete by 2030.
  • Goldman Sachs: up to 300 million jobs worldwide could be affected.
  • Zaid notes rising consumer anxiety and spending cutbacks, especially among less affluent Americans.

3. The K-Shaped Consumer Divide

[09:15 – 11:20]

• Wealthy consumers drive spending: Top 10% of US earners now account for nearly half of consumer spending.
  • Companies from Coca-Cola (Topo Chico, FairLife protein) to McDonald's (“two-tier economy”), Chipotle, Delta Airlines, and Hilton note premium segments booming while lower-income spending contracts.
  • Lower/middle classes are feeling the squeeze: belt-tightening on food, auto defaults rising, more coach seats empty vs. packed business/first class.

“This is happening across the entire economy. The top 10% of earners are spending like crazy while everyone else is pulling back.”
— Zaid Admani [11:15]

4. Future Outlook: Is the AI K-Shaped Economy Permanent?

• Zaid’s measured optimism:
  • AI may ultimately create new categories of jobs, as the internet did (including podcasting, his own career shift).
  • Transition periods are always uncomfortable and feature lopsided winners and losers.
  • Hope: Over time, the “gap between the top and bottom K starts closing.”
• But risks are real, as are present-day pains for broad swaths of workers and companies.

Notable Quotes & Timestamps

• “Collectively, big tech is spending 60% of their operating cash flow to build this AI infrastructure... That means that these big tech giants will end up capturing all the upside from AI if demand... materializes.”
  — Zaid Admani [03:20]

• “If you’re an investor or an employee of one of these companies, you’ve likely been a winner in the K-shaped AI economy that we live in today.”
  — Zaid Admani [06:10]

• “There were all these layoff stories... didn’t show up in the aggregate job data... The surprising thing in the US labor market right now is how few layoffs there are, not how many.”
  — Jason Furman [07:30]

• “This is happening across the entire economy. The top 10% of earners are spending like crazy while everyone else is pulling back.”
  — Zaid Admani [11:15]

Important Segment Timestamps

• 00:25 – 05:30 – Breakdown of AI spending, hyperscalers, chip & power suppliers
• 05:30 – 07:20 – OpenAI’s disruptive role and emerging investor concerns
• 07:30 – 07:52 – Jason Furman on labor market alarms
• 08:00 – 09:00 – Stats on layoffs, unemployment, and job openings
• 09:15 – 11:20 – Discussion of K-shaped consumer spending, company-specific examples
• 11:50 – End – Zaid’s perspective on whether the “K” will close

Closing Thoughts & Takeaways

• The “K-shaped” AI economy is real—with tech, chips, and premium brands surging, and lower-wage jobs, young workers, and mainstream brands feeling the pinch.
• While headlines can exaggerate doom, structural challenges remain for labor and consumer spending.
• Zaid encourages optimism and adaptability, hoping AI will ultimately lead to broader opportunities—though he acknowledges the path may be rocky for many along the way.

Useful For: Investors, professionals, job seekers, and anyone trying to understand how AI is reshaping winners and losers in the market and the labor force.
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