Day: November 29, 2025

• There’s an ongoing debate in the tech world about whether we’re in the midst of an AI bubble.
• That debate is just now starting to make its way into the halls of power in Washington.
• AOC said that we could be in a “massive” bubble — and there should be no bailout if it pops.

Are we in the middle of an AI bubble? Ask a lawmaker, and they probably won’t have a definitive take for you.

“If I knew that, I’d be in a different line of work,” Rep. Ro Khanna, a Democrat who represents much of Silicon Valley, told Business Insider.

The AI bubble debate has been raging in the tech world since August, when OpenAI CEO Sam Altman said that investors had grown “overexcited” about the technology.

There are also concerns about circular spending patterns among tech companies investing in AI technology, and fears that companies won’t be able to recoup the billions of dollars they’re spending on data centers and other AI infrastructure. Bill Gates has explicitly compared it to the dot-com bubble of the late 1990s.

However, many in the tech world remain confident that there’s no bubble, citing continued high demand for AI products.

“Are we in an AI bubble? I have no idea,” Democratic Sen. Brian Schatz of Hawaii told Business Insider. “Even the AI people don’t know.”

Democratic Sen. Elizabeth Warren of Massachusetts said that while she was unsure whether there’s a bubble, she’s concerned by “how much of the economic activity in the stock market and across the country is driven by this one sector.”

“If it is overvalued, when that bubble pops, it’s going to be felt everywhere,” Warren said. “The concentration makes the economy far more vulnerable than it otherwise would be.”

One of the few lawmakers who’s been outspoken about the potential for a bubble is Democratic Rep. Alexandria Ocasio-Cortez of New York, who said at a hearing last week that we may be in a “massive economic bubble” that could pose “2008-style threats to economic stability.”

“Should this bubble pop, we should not be entertaining a bailout,” Ocasio-Cortez added.

The debate is slowly making its way to Capitol Hill as the Trump administration and some Republicans in Congress are pursuing ways to make it easier for the AI industry to do business.

President Donald Trump, when asked, has largely shrugged off questions about whether he’s worried about a bubble.

“I guess. I worry about everything,” Trump said in an interview with CBS’s “60 Minutes” earlier this month. “I hope it’s gonna be very good. But if it’s not so good, we’re protected.”

Trump has begun to talk up the need to restrict states’ ability to regulate AI, reviving a fight that played out over the summer as Congress considered the “Big Beautiful Bill.”

The bill originally included a provision that would have blocked states from enacting some regulations on AI for 10 years. It was strongly supported by Sen. Ted Cruz of Texas, the chairman of the Senate Commerce Committee who’s positioned himself as an ally of the AI industry on Capitol Hill. It was later stripped out of the megabill in a 99-1 vote.

When asked last week whether he sees a bubble in the AI industry, Cruz was circumspect.

“Will there be uncertainty? Will there be economic challenges? Of course,” Cruz told Business Insider. “But for technology of this magnitude, it’s in our interest that America win the race, and not China.”

Ocasio-Cortez argued that there’s a connection between the potential bubble and financial incentives to make AI technology more exploitative.

“People’s deepest fears, secrets, emotional content, relationships can all be mined for this empty promise that we’re getting from these companies to turn a profit,” Ocasio-Cortez said at the hearing.

But for some of those who want to see stronger regulation of AI, the question of a bubble is largely beside the point.

“Bubble, no bubble, whatever,” Sen. Josh Hawley of Missouri said. “We need to focus on the effect on working people.”

• People analytics firm Visier analyzed who is more likely to be rehired within 15 months of being laid off.
• Managers and workers in the finance and retail industries were more likely to be called back.
• Andrea Derler, principal researcher, expects the rate to rise as companies deal with AI and uncertainty.

Sometimes a layoff isn’t a farewell forever.

Rehires of people who were laid off could become more popular in a shaky job market. Visier, a people analytics firm, looked at how many people were rehired at their previous employers within 15 months of being terminated. Visier found about 5.3% of laid-off employees were rehired, based on global data from 2018 to 2024 covering 142 large organizations with over 2 million employee records.

Andrea Derler, principal researcher at Visier, expects boomerang hires of people who were previously laid off to increase as companies figure out how to handle “AI-induced pressures” and economic uncertainty.

“In times of extreme turmoil, where workforce planning is made even more difficult due to rapid, unexpected, and unpredictable changes, layoff boomerangs seem to be more prevalent,” Derler said.

Separately, ADP Research found that the share of new hires who were boomerang employees increased from 26% in March 2022 to 35% this past March. “In an era where the outlook on the jobs market is fuzzy or uncertain, it makes sense for both employers and employees to stick with what they know,” Nela Richardson, ADP’s chief economist, previously told Business Insider.

The US is in a mostly frozen job market marked by low layoffs, but also low hiring. Job growth slowed from a monthly average of 111,000 between January and March to about 62,000 between July and September.

Layoffs in the US are low, but announcements are adding up. Outplacement firm Challenger, Gray & Christmas found that there have been over 1 million job cuts announced from US-based employers this year as of October. Verizon, Amazon, government agencies, and others have made headlines for their decisions.

Managers and people in finance and retail are more likely to rejoin their companies

Derler said Visier’s data doesn’t show a surge in manager layoffs, but they are also more likely to be rehired. “Organizations realize that it’s really hard to find a good manager because the manager is responsible for a lot of things: performance, productivity, but also engagement of other employees,” she said.

Among the handful of industries Visier looked at, finance and retail had the highest rates of laid-off employees that were rehired at 7.5% each. Derler said retail has a lot of turnover, so it makes sense that workers may go back and forth. She suspects the rate for the finance industry is because the work duties involve certain skills and expertise. Instead of tapping into a new talent pool, businesses may turn to people previously on their payroll and who have already demonstrated their capabilities.

Meanwhile, Derler said tech’s rate of 4.3%, below the average rate and the lowest among the five industries looked at, could be because desired skills and knowledge quickly evolve. So, unlike finance, firms may want to look at a new talent pool.

“Prompt engineers a year ago was the big job — nobody talks about prompt engineering anymore,” Derler said. “Skills are changing so fast, so that’s why I can assume that they’ll be looking for new people with new skills rather than those who they know.”

Before being laid off, network and develop your skills

Derler said all parties need to have good “layoff hygiene,” where both sides are respectful. She said workers should also try not to internalize their layoff or think it’s something they did wrong.

She also emphasized the importance of always keeping up your skills, so that if you are laid off, you can confidently add your knowledge to your résumé or talk about it in an interview.

Derler also suggested staying connected with people you worked well with in case you do rejoin — not just so it’s pleasant to return, but because they might know about an opening.

Derler said she interviewed some boomerangs and found some were still in touch with their old boss. “When their manager then realized they actually needed somebody again, they would be the first that they would call,” she said. “Makes sense, right? Because you know the person, you get on well with them.”

Have you gone back to your previous job? Are you a hiring manager who has made boomerang hires? Reach out to this reporter at mhoff@businessinsider.com.

• There is plenty of fear about AI rendering an expensive Stanford degree obsolete.
• While most classes still ban AI, one of the most popular courses encourages students to use AI coding tools.
• A who’s who of AI software development engineers has guest lectured in the class.

In a dimly lit Stanford University basement classroom packed with anxious computer science students, lecturer Mihail Eric tells the class he’s going to teach them how to code without writing a single line of code.

Eric’s class, The Modern Software Developer, has quickly become one of the hottest Stanford CS courses this semester, which bills itself as the first attempt at a major university to embrace coding tools like Cursor and Claude.

It is an unsettling time to be a computer science major, even at a school as prestigious as Stanford, knowing you will be graduating into a world where AI is getting better at programming by the day.

“It can be scary because you think your job security is being compromised, and you might get replaced,” said Brent Ju, one of the class’s dozens of students. Ju is graduating this spring and so far has no job offers. “The market is a little tough. I am still interviewing.”

“If you can go through this entire class without writing a single line of code, more power to you,” said Eric, a Stanford alum who purposefully designed the course to be an antidote to the majority of classes that still ban the use of AI.

A who’s who of AI coding luminaries has stopped by the bucolic Palo Alto campus to guest lecture, including Boris Cherney, creator of Claude Code, and Gaspar Garcia, head of AI research at Vercel. Martin Casado, a general partner at Andreessen Horowitz, will address the final class next week.

On a recent morning inside the classroom, Silas Alberti, head of research at Cognition, delivered a lecture called “The Opinionated Guide to AI Coding in 2025.”

“I think what you learn in school has always been a little bit behind, so I’m glad that this course exists to teach the newest stuff,” Alberti said after his lecture, surrounded by students lined up to greet him like a celebrity. “If you learn with yesterday’s methods, you are not going to be super competitive, but if you really lean into the tools, you can be a super engineer.”

Excitement and fear

The mood of the students in the class reflects the current zeitgeist of Silicon Valley, with excitement about what many consider one of the most significant technological advancements of our lifetime. But there is plenty of fear about AI rendering an expensive Stanford degree obsolete.

When Eric graduated in 2016, getting a Stanford CS degree was the golden ticket.

“People thought ‘I’m going to go to an elite university, and then I’m just going to be set for life and have a cushy six-figure job for as long as I want at a FAANG company,'” he said.

The number of CS students surged as tech companies embarked on a massive hiring spree.

“Meanwhile, a lot of companies that hired a lot during COVID saw that they overhired,” Eric said. “Now you have a surplus of young talent and also a surplus of newly laid-off, quite experienced talent.”

Making matters worse, AI is already proficient in coding and continues to improve rapidly. Microsoft CEO Satya Nadella has said up to 30 percent of the company’s code is being written by AI, while Anthropic’s CEO Dario Amodei predicted in March that AI had the potential to write “essentially all” of the company’s code within a year.

Ju, who says his dream job would be to work at Anthropic, says he is trying to stay positive.

“It’s exciting because if the tools aren’t going to replace you, but act as an assistant, it can really supercharge your productivity and make you a more effective developer,” Ju said. “I’m more of an optimist who leans toward that direction.”

Zach Lloyd, founder and CEO of Warp, a developer tool for agentic workflows, delivered a guest lecture last month and maintains he is still very interested in hiring CS students.

“The idea that people from a place like Stanford with a CS education won’t be able to get jobs as engineers is a little overblown,” he said, adding that knowing the fundamentals of programming is still vital to effectively using Warp or Claude. “These tools are accelerators but not replacements yet, and the actual people who will be best at wielding them are those who have a solid foundation.”

Eric plans to teach the course again next year, though he says AI is advancing so fast that the class will likely look very different.

“People were asking me if I was concerned that by week seven, things are going to be obsolete that I talked about in week one?” he said. “Yes, it is a concern. So far it hasn’t happened yet.”