The AI bubble

Summary

Podcast Summary: Today, Explained – "The AI bubble" (October 28, 2025)

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Main Theme & Purpose

This episode of Today, Explained explores the rising concerns that the current boom in artificial intelligence (AI)—fueled by soaring investments, valuations, and market hype—is a speculative bubble primed to burst. The hosts, Noel King and guests, dissect parallels to past bubbles, examine who stands to gain or lose, and question the actual utility and economic impact of recent AI advancements. Featuring tech journalist Lily Jamali (BBC) and MIT fellow Paul Kudrowski, the discussion contrasts the hype with historical context and real-world data.

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Key Discussion Points & Insights

1. Defining a Bubble

• [02:35] Lily Jamali: Describes a bubble as "an expectation of future profits" so alluring that it leads to speculation. It’s difficult to know you’re in a bubble until it pops.
• Parallels drawn to past bubbles: tulip mania, housing crash of 2008, dot-com bust.

2. Signs of an AI Bubble

• [03:02] Lily: Notes the omnipresence of AI advertising (billboards on the 101 freeway in the Bay Area) as one sign.
• The amount of money pouring into AI, especially via massive investments in OpenAI and other firms, is unprecedented.
  • OpenAI valued at $500 billion, now the world's most valuable private company.

3. Interconnected Investments & Vendor Financing Concerns

• [04:28] Lily: Outlines complex, circular investments between firms like Nvidia, AMD, Broadcom, Microsoft, Oracle, and OpenAI.
• [05:55] Describes "vendor financing" or "circular financing," where "money circulates between companies through investments and purchases," raising doubts about genuine demand.
  • [06:04] Paul Kudrowski: "Vendor financing has a pretty spotty history. Frankly, it's been a feature of past bubbles that we've seen."

4. What's Being Built and Its Real-World Utility

• [06:55] Beyond ChatGPT, OpenAI has launched Sora 2 (video-generation tool) and ChatGPT Atlas (AI-powered web browser).
• Debate over whether these tools deliver real economic productivity.
  • [07:24] Lily: "It is loved by some, reviled by others who think it is going to just flood all of our feeds and our lives with AI slop."
  • MIT study cited: Most AI initiatives in the workplace aren't turning a profit, and usage can be performative.

5. AI's Outsized Influence on Stock Market Gains

• [09:01] Noel: Astonished by the stat: "80% of the gains we've seen in the market have come from...a handful of companies that are either working on AI in some way or are very basically very much devoted to AI."
  • [09:49] Lily: If the AI bubble bursts, a substantial portion of American wealth could be wiped out (estimate: $20 trillion in household wealth at risk).

6. Historical Parallels and Potential Fallout

• [10:10] Lily: Cites dot-com crash: Microsoft lost 2/3 value, Amazon shares nearly worthless, Oracle down 80%.
  • Massive potential for broad economic impact and job losses if AI bubble pops.

7. Skepticism and Hopes for a Pop

• [11:40] Lily: Some hope the bubble bursts—citing dangerous ambitions like artificial general intelligence (AGI), ecological concerns (data centers’ energy/water use).

8. How Would We Know?

• [13:06] Lily: Jokes about billboards switching from AI to the next fad, more seriously looks to stock market signals, job losses, and empty data centers as key indicators.

9. The Real AI Bubble: Infrastructure & Overbuilding

• [18:59] Paul Kudrowski: Argues the real AI bubble is in capital expenditures: "We're spending this prodigious amount of money on data centers and on...underlying infrastructure with probably no likelihood of recovering most of that cost... most of those assets become worthless because of the speed at which they depreciate."

10. History's Lesson: Bubbles Leave Scars

• Analogies with 19th-century railroad and electrification booms: overbuilding followed by years of wasted capital, company failures, and long recoveries.
• [24:53] Noel King: "How destructive are bubbles and what do they tend to destroy?"
  • [24:59] Paul: "All of them leave behind scar tissue, do immense damage… if everything reverses, goes 20 or 30% in the other direction, you're much poorer than you were and that'll change your spending. And that has implications for recessions."
  • [26:22] Paul: Rebuts the claim "things always work out"; impacts can take decades to truly recover.

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Notable Quotes & Memorable Moments

• [02:35] Lily Jamali: "A bubble can take hold when there is an expectation of future profits and when that expectation is so alluring that it ends up leading to speculation."
• [06:10] Lily Jamali: "Does that muddy the waters when it comes to understanding how much demand there really is for what a company is making?"
• [09:01] Noel King: "80% of the gains that we've seen in the market have come from a handful of companies that are either working on AI in some way or are very basically very much devoted to AI."
• [09:49] Lily Jamali: "If we are in fact in a bubble and that bubble were to burst, retirement accounts would be touched by this… $20 trillion in wealth held by American households could be wiped out."
• [13:06] Lily Jamali: "Have we moved on from AI and are we back to touting the metaverse? ...We might end up in a situation where we have a whole bunch of data centers sitting empty across the country."
• [18:59] Paul Kudrowski: "We're in this moment where there's an AI capital expenditure bubble, meaning that we're spending this prodigious amount of money on data centers...with probably no likelihood of recovering most of that cost."
• [24:59] Paul Kudrowski: "All of them leave behind scar tissue, do immense damage… if everything reverses, goes 20 or 30% in the other direction, you're much poorer than you were and that'll change your spending. And that has implications for recessions."
• [26:22] Paul Kudrowski: "No, that's not the case. That's kind of a line of patter from the technology community and others...almost every technology revolution has caused us huge damage and can take decades before we get back to where we were before."
• [26:58] Noel King: "In the long run, we're all dead," (quoting economist John Maynard Keynes).

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Timestamps for Key Segments

| Time | Segment/Topic | |-----------|--------------------------------------------------------------------| | 02:13 | Defining a bubble in economic/financial terms | | 03:02 | Signs of the AI bubble: billboards, flood of investment | | 04:28 | OpenAI's funding & web of vendor financing with tech giants | | 06:48 | What products OpenAI actually offers beyond ChatGPT | | 07:24 | MIT study: AI often not profitable, workplace skepticism | | 09:01 | 80% of 2025 market gains attributed to handful of AI-focused firms | | 09:49 | Potential market fallout—$20 trillion in household wealth at risk | | 10:10 | Dot-com crash: historical analogy for risk | | 11:40 | Skeptics hoping for a bubble burst, ecological costs of AI | | 13:06 | How to spot the end of the bubble: ads, empty data centers | | 18:59 | Paul Kudrowski: AI infrastructure is the real bubble | | 19:54-20:06| Explosive growth in US data centers over the past decade | | 22:26-24:53| Bubble history: railroads, electrification | | 24:53 | What bubbles destroy and why recovery is slow and painful | | 26:22 | Refuting "things always work out"; social and economic aftermath | | 26:58 | "In the long run, we're all dead" |

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Flow & Tone

• Cautious, analytical, laced with tech skepticism and market realism.
• Humorous, self-aware asides (“what do the billboards on the 101 say now?”).
• Notable for clear-eyed warnings: both about economic risk and the irrecoverable damage that unchecked infrastructure booms can cause.

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Conclusion

Today, Explained offers a thorough, sobering analysis of the “AI bubble,” arguing that while AI’s potential is real, the scale and nature of investment—especially in infrastructure—mirrors historical excesses with painful aftershocks. The episode warns that most Americans, through investments and retirement funds, are exposed. Whether the bubble pops soon or not, history suggests the aftermath might not be as rosy as industry optimists claim.

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Transcript

[Noel King]

Are we in an AI bubble? A simple answer is we better hope not. You are far too young to remember tulip mania in 1637. Google it. But perhaps you remember the housing bubble that caused the 2008 great financial crisis.

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[Paul Kudrowski]

Street since the crash of 1987. Shock and panic evident on the faces.

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Of those on the trading floor.

[Paul Kudrowski]

How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills? Raise their hand.

[Noel King]

How about when bubbles pop, there's pain. But while consensus is growing that we are in an AI bubble, there's a fight raging over what type of AI bubble we're actually in and what will happen when she goes pop. What to keep your third eye open for. Coming up on Today Explained.

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[Noel King]

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[Paul Kudrowski]

This is an artificial intelligence version of Drake and you are listening to today explain.

[Noel King]

2025 has been a boom year for the stock market despite a ton of economic uncertainty. Powering the boom is AI. Big investments, big faith in AI. Does AI deserve it? Or is this a bubble? Lily Jamali covers technology for the BBC. Lily, let's start this way. What is a bubble?

[Lily Jamali]

That is a great question. A bubble can take hold when there is an expectation of future profits and when that expectation is so alluring that it ends up leading to speculation. So there's a long history of boom bust cycles in our country and it's not always clear when you're in one. Even when you think we're in a bubble. You know, the timing of that can get pretty tricky.

[Noel King]

At the moment, everybody's talking about an AI bubble.

[Lily Jamali]

Why is that I think it's because of, first of all, all the interest in artificial intelligence. You know, I live in the San Francisco Bay area, and when I drive down the 101 freeway, it is all billboards about AI. So there you go. You know, that's sign number one. What are the billboards on the 101 saying? But more significantly, you know, I think there's real concern right now about the potential blast radius that an AI bubble bursting could have because there's just so much money pouring into artificial intelligence. So take a company like OpenAI, which brought artificial intelligence into the mainstream in 2022 with ChatGPT. That company was actually founded a decade ago as a nonprofit by its current CEO, Sam Altman and Elon Musk. Actually, they're now suing each other in court over what happened next. Its mission at the time was to create artificial intelligence tools for the benefit of humanity. Fast forward a few years and Altman has been reorienting the company to be more of a for profit enterprise. So they've been taking investor money left and right to the point now where OpenAI is valued at $500 billion. It is the most valuable private company anywhere. And so you might think, well, if anything goes wrong, it's those people who've been able to invest that are going to be affected. The thing is, OpenAI and some other AI developers have been taking investments from publicly traded companies, companies that you and I can invest in and that we actually might already own through our retirement funds without even knowing it. So there's this growing web of deals and sticking with OpenAI, let's look at that. Nvidia, the AI chip designer, is invested in OpenAI in a big way. Chipmaker AMD, Broadcom, they both just struck deals with this company in recent weeks. Microsoft had a massive early partnership with OpenAI, same with Oracle. It is a very long list and it's growing all the time. AI development, at least the way that OpenAI and the other AI companies in the US are doing it, involves serious infrastructure. So data centers and a lot of sophisticated chips need to be purchased. The kind of chips that Nvidia actually designs. So Nvidia just announced this $100 billion investment in OpenAI a couple weeks ago. The issue there is that a lot of that money will presumably make its way back to Nvidia. So that construct where Noel, I give you money and then you in turn buy my stuff is sometimes known as vendor financing or circular financing.

[Sponsor/Ad Voice]

Instead of one company paying another its products, these AI giants are seemingly passing cash back and forth through stock agreements and future chip purchasing deals.

[Paul Kudrowski]

Vendor financing has a pretty spotty history.

[Sponsor/Ad Voice]

Frankly, it's been a feature of past.

[Paul Kudrowski]

Bubbles that we've seen.

[Lily Jamali]

Nvidia says OpenAI can spend that money however they please, but undoubtedly a lot of it is going to go back towards Nvidia chips. So the concern is, does that muddy the waters when it comes to understanding how much demand there really is for what a company is making and in this case, whether there is actually as much demand for AI tools as there seems to be right now. So you've got this tangled web of deals that has a lot of people in Silicon Valley noting the parallels to the.com era.

[Noel King]

Does OpenAI make anything that I use other than ChatGPT? Like what is all this valuation about?

[Lily Jamali]

They are producing things all the time. So just in the last couple of weeks, for example, they have unveiled Sora 2, which is this video generation tool that's made a lot of headlines.

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[Paul Kudrowski]

I say to you today, my friends.

[Noel King]

I have a dream that tongue, tongue.

[Paul Kudrowski]

Tongue Sahora will get a low taper fade and it will cost 6, 7 barbershop headquarters.

[Lily Jamali]

It is loved by some, reviled by others who think it is going to just flood all of our feeds and our lives with AI slop. They recently announced a new browser that will compete with Google Chrome. OpenAI is announcing live right now that it is launching ChatGPT Atlas, an AI powered web browser. It's able to remember previous chats and searches. There's even a mode that completes tasks for you. And so there are real things coming out of this company, real tools that people can use right now if they want to. The question is, what is the value of that? Is it actually boosting productivity in a way that is good for the economy? There was a study out from MIT this summer that cast doubt on that notion, finding that the vast majority of AI initiatives in the workplace aren't helping companies turn a profit. And actually, I talk to a lot of rank and file workers in the tech industry who tell me that a lot of times they're using these tools in a way that is somewhat performative, just to be able to show their bosses that they're using AI, but they don't always feel the benefits in their actual work. So this notion of how much AI is actually impacting the economy in real ways, impacting the workforce in real ways, that doubt could go away. Let's see what happens. But I think there's a lot of eyes on the stock market, where you have a bucket of American tech companies, many of them working on AI in some way or another, that make up 80% of the gains that we've seen in the stock market this year.

[Noel King]

80%. Sorry, you just flew right by that. 80% of the gains that we've seen in the market have come from OpenAI or all AI companies, from a handful.

[Lily Jamali]

Of companies that are either working on AI in some way or are very basically very much devoted to AI. And that is a metric that has so many people concerned right now.

[Noel King]

Right. Because if one industry, one unproven industry is making up that much a percentage of the gains, that means that if you are exposed to the market, if you've got your retirement in there, if you got any money in the market, you are exposed to this risk. What happens if we are in an AI bubble and it bursts? What does that look like?

[Lily Jamali]

If that were to happen, it would certainly be reflected in the stock market. You know, just to give you an example from the dot com era.

[Sponsor/Ad Voice]

So one day I'm online and I.

[Noel King]

Find beyond.com Cosmo.com has videos and ice cream.

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Ebworld.com we're inside your world pets.com because pets can't drive.

[Lily Jamali]

When that bubble burst, Microsoft shares lost about 2/3 of their value. Amazon, which was then known as Amazon.com almost went to zero. Oracle, which has been one of the big winners in the AI boom, well, back then their shares were down 80% when the music stopped.

[Paul Kudrowski]

After what they are already calling Black Friday, they are counting up the damage on Wall Street.

[Sponsor/Ad Voice]

This closing bell might as well have been an alarm. So savage was the selling. Even the most venerable high tech giants.

[Paul Kudrowski]

Such as intel and Sun Microsystems were now walking wounded. And countless.com wunderkinds were now pushing up the daisies. Webvan dead, excited, home dead.

[Sponsor/Ad Voice]

Theglobe.com, pets.com, boo.com, dead, dead, dead.

[Lily Jamali]

So with that in mind, somewhere on the order of two thirds of Americans own stock, those accounts are going to be deeply affected. If we are in fact in a bubble and that bubble were to burst, retirement accounts would be touched by this. By one estimate, $20 trillion in wealth held by American households could be wiped out. And that is going to have impacts across the American and the global economy. We're talking about potential job losses and impacts on wages for jobs that are left.

[Noel King]

Is anyone hoping that we are in a bubble and that the bubble bursts? Is anyone rooting for this?

[Lily Jamali]

There is a camp of skeptics I would say, who hope the bubble bursts. Part of the, you know, artificial intelligence race is about achieving AI that can surpass human intelligence. Some call it artificial general intelligence, or AGI, others call it super intelligence. And then you have people who look at this and say, you know, is that a good idea? Do we really want intelligence that can surpass what humans are capable of? And you have doomers who think that this could spell the end of humanity as we know it. In addition to that, there are very real concerns about the potential ecological damage that running towards AI unfettered in this way can cause residents.

[Noel King]

Utility bills are already going up.

[Lily Jamali]

We have water issues out the wazoo.

[Noel King]

And we know that data centers are.

[Lily Jamali]

Extremely energy and water intensive.

[Noel King]

A single data center building is using as much as a city worth of power.

[Lily Jamali]

So we could see everyday Americans contend with higher electricity rates, limited water availability. These are all very real concerns that we've already seen play out in various ways in different parts of the country.

[Noel King]

We started this conversation, Lily, by asking, are we in a bubble? And you said, often, if not always, you don't know until you know, what should we be looking out for? How are we going to know?

[Lily Jamali]

Well, I'm going to be looking at what the ads on the 101 freeway say. That's my first go to. Have we moved on from AI and are we back to touting the metaverse? Because that's generally where the trends come first. I think we. I'm imagining we would know in this case if we're seeing indications in the stock market, if people are suffering from job losses, we might end up in a situation where we have a whole bunch of data centers sitting empty across the country. That's one physical manifestation that we might see because we are currently in a relentless building spree. There is just, frankly, what feels to a lot of people like a lot of hype in this space. And it's just interesting getting to have FaceTime with people like Sam Altman, because when you are in the room with him for even five minutes, the message is always, we just need more. We need more compute. And if you just make it happen, we can deliver so much more. The question becomes, is whatever they want to deliver, something that people really want and will use and will have impacts on us that will make us more productive, that will ideally allow us to do more with our time.

[Noel King]

That was the BBC's Lilly Jamali. Do know that Vox Media has partnership with OpenAI? Many media outlets do. It does not affect our editorial decisions, though, in any way. Coming up, an argument that we are definitely in an AI bubble. It's just not the AI bubble that everyone is thinks we're in.

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[Noel King]

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Get 20% off your first order when you use the promo code [e-mail] that's 20% off when you use code [e-mail] Support for today Explained comes from Rippling. What's rippling? You gotta wait for it. Rippling wants you to know that finance teams can waste weeks chasing receipts, reconciling spreadsheets, fixing errors across a slew of disconnected spend tools. And that's what rippling is here to fix, says Rippling. Helping you keep your spending under control without the busy work of clunky finance software. How's this for streamlined Rippling is a unified platform for global hr, payroll, IT finance. They say they've helped millions of doll replace their mess of cobbled together tools with one system designed to give leaders clarity, speed, control. By uniting your employees, teams and departments in one system, Rippling can help remove the bottlenecks, the busy work, the silos your software might have created, says Rippling. Automated perfectly in sync. Seriously simple to use. Rippling can give your company a one stop shop for your people, their data, everything they touch. With Rippling, you can run your entire HR and IT and Finance operations as one. And right now you can get six months free of all this when you go to rippling.com explained. Learn more at r-I p p L-I-N-Com explained that's rippling.com explained for six months free terms and conditions do apply. Guys, you're listening to today, explained Paul Kidroski is a partner with SK Ventures and a fellow at MIT's Institute for the Digital Economy. Paul been causing all kinds of trouble lately, arguing that we are not paying attention to the right AI bubble. We're assuming that AI is untested and overvalued. Paul doesn't think so.

[Paul Kudrowski]

AI is obviously a hugely important technology. It's going to be hugely useful. It probably already is useful. I know it is to me. It probably is to you. So that's not the point, though. The point is that we're in this moment where there's an AI capital expenditure bubble, meaning that we're spending this prodigious amount of money on data centers and on sort of the underlying infrastructure for AI, with probably no likelihood of recovering most of that cost and a significant likelihood that most of those assets become worthless because of the speed at which they depreciate. Build, baby, build, as they say.

[Noel King]

That is the White House Silicon Valley.

[Paul Kudrowski]

Slogan urging companies to invest in artificial.

[Noel King]

Intelligence infrastructure inside the United States. Today we have $50 billion of data centers that we own or are building another $50 billion pipeline behind that. What's driving that is AI.

[Lily Jamali]

Around 2010, we were seeing about 311 data centers. That was nationwide.

[Noel King]

And then by the end of last.

[Lily Jamali]

Year, that number had nearly quadrupled to 1,240 data centers.

[Paul Kudrowski]

But increasingly, and this is the piece that got me concerned when I first started looking at this, an increasing fraction of the money that's that's being spen. All of these things that allow us to distribute AI like electricity, it's coming from an increasing share of. It's coming from debt. And it gets really, really complicated in a hurry. But the point is that debt comes with obligations. You don't get to just walk away from it. So that makes this moment even more perilous.

[Noel King]

If AI is so important, if this is like a game, changing life, changing humanity, changing technology, why does it not make sense for trillions of dollars to be rushing in? Isn't this what we should be doing?

[Paul Kudrowski]

Yeah, we should be. But the problem, of course, is that there's this idea of what's called a rational bubble. Everybody thinks they're doing the right thing, but when you add everybody's right thing together, you end up with a prodigious amount of waste. So it's no different than if you go back to the 19th century railroad bubbles. In both the UK and the US there was simply too much track, too many enthusiastic railroad builders building almost adjacent tracks to the same locations. And this led to an incredible amount of waste. But it also led to company failures. It led to various market crises across the 19th century in the US and repeatedly in the UK. So it's not as simple as saying, well, this is important, so we should build it and not care what it costs and not care the consequences.

[Noel King]

If so many smart people think that we are in a bubble, or why is money still flowing in to data centers and other AI infrastructure at the rate that it is? Why don't people pull back a little bit?

[Paul Kudrowski]

I'm not convinced that many people think it is a bubble. As I talk to people in technology, the most common response I get from people is, not only is this not a bubble, but it's probably the most important technology of our lifetime. We have an opportunity to build a super intelligence, a godlike intelligence on top of all of these chips and buildings and this AI electricity thing we're creating. And so to say we should slow down at this point, according to the technology community, is just a huge error. So there are people outside of technology who say, oh, this is an incredible amount of spending. The bank of England said it last week. Other people are cautioning about it, but not inside of technology.

[Noel King]

The United States and humanity broadly certainly has had no shortage of bubbles throughout history. You mentioned the railroads walk us through some famous American bubbles.

[Paul Kudrowski]

So the railroad's probably among the most prominent in the U.S. and that was, again, an enthusiasm for the idea. And that created an incredible frenzy of new companies of track laying the Same thing happened in the 20s during electrification. So in the 1920s we went from a single digit percentage of American rural areas having access to electricity and by the end of the decade it was more or less ubiquitous. Everyone had access to electricity. But at the same time that gave rise to this proliferation of utility companies, ventures that were doing all kinds of questionable things in terms of overspending. And in part you could argue that electrification and the frenzy around it gave rise to the stock market rise of the 20s, which led to the crash of 29 and help precipitate the Great Depression.

[Noel King]

Okay, so that was 29. We're talking a century ago. We have seen other more recent bubbles. Yeah.

[Paul Kudrowski]

Oh, of course, but I'm just. People are pretty familiar with the telecom and dot com bubbles, but the closest historical analogy to what's happening now genuinely is railroads and electrification. And that it's 100 years ago is in part why the people's memories are so dimmed of it. And instead they babble about, oh, you know, fiber optic cables during the dot com bubble. Well, that all worked out. These are all the wrong references. The right references to what's going on today, both in terms of scale and scope, was the railroads and electrification. There's likely only to be one winner. In the same way that we don't need to have two sets of tracks to Philadelphia, we probably don't need the same number of companies delivering what are called these large language models, these AI models that people are using. These will naturally shrink. We're only going to have a few major providers because it's very hard to differentiate even if you try them today. I defy you to tell the difference between getting an answer from OpenAI, Microsoft or Claude Anthropic. They all more or less are already beginning to feel like the same.

[Noel King]

Paul, ultimately, how destructive are bubbles and what do they tend to destroy?

[Paul Kudrowski]

All of them, leave behind scar tissue, do immense damage? It's just a question of the kind of how big the bubble is and where the damage goes. Because it's almost the story of bubbles in 200 years in modern finance is that there's no such thing as a bubble that doesn't cause damage. And that's why I find it a bit strange when people say, oh, it'll all work out because we'll have something left behind. And it's as if they always ignore the ice idea that all financial bubbles have consequences. Whether it's wealth destruction because stock markets decline, or whether it's because misallocated money causes money to go to one place rather than somewhere else. So if you're just holding an index fund and thinking you're being very conservative, you're actually soaking in AI right now. So if everything reverses, goes 20 or 30% in the other direction, you're much poorer than you were and that'll change your spending. And that has implications for recessions.

[Noel King]

Yes, it does. But ultimately, things come back, right? What is what is? Tell me if I'm wrong, but what is strong, survives, gets more nimble, gets more creative, markets recover over time, jobs come back, et cetera, et cetera. Like, isn't, isn't it always the case that the bubble bursts and then what it leaves behind is, I don't know, maybe not something beautiful, but something workable?

[Paul Kudrowski]

No, no, that's not the case. That's kind of a line of patter from the technology community and others in other bubbles. But the reality is almost every financial, every technology revolution has caused us huge damage and can take decades before we get back to where we were before. And as the famous line in economics goes, in the long run, it may work out, but in the long run, we're also all dead.

[Noel King]

In the long run, we're all dead is a quote from John Maynard Keynes. If you didn't know, now you know. Paul Kudrowski, MIT SK Ventures Today's show was produced by Avishai Artsy and Kelly Wessinger. It was edited by Amina El Saadi and fact checked by Laura Bullard and engineered by Adrian Lilly and Pat Patrick Boyd. I'm Noel King. It's TODAY Explained. Support for Today Explained comes from American Giant. Freedom, you may know, ain't free and cheaply made clothes ain't actually that cheap. Not only do they fall apart quickly and have to be replaced more often, there are costs for the environment and costs for the communities that make those clothes. The founders of American Giant said they decided to see if they could do things differently. So all of their garments, they say, are designed for durability, to outlast the trend cycle. And they're all made made in the usa. Our colleague Andrew Melnasek has tried American Giant. Here's what he has to say.

[Sponsor/Ad Voice]

In the box that I got, they sent me a set of pants and a shirt. Taking out of the packaging and tried it on for the first time was a good reminder that, hey, actually nice quality clothing matters. It just feels nicer. It doesn't feel like it's going to fall apart after a few washes. I don't have to worry about the stitching or the color fading after a few uses.

[Noel King]

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