If the argument holds, the AI build-out is a source of upward pressure on bond yields, power prices and wages for scarce technical staff, which would keep financing costs high for sectors outside technology. That fits with this week’s 24-year high in 10-year Treasury yields, which Bloomberg partly attributed to AI-related corporate borrowing. For equities, the thesis implies widening divergence between AI beneficiaries and consumer-facing companies facing squeezed household budgets, a pattern visible in PepsiCo’s North American results. Energy markets are a complicating factor, as Iran-war oil prices are lifting electricity and input costs independently of AI demand.-The Netherlands found gas and watched the rest of its economy wilt; Derek Thompson’s worry is that America has found AI and is running the same experiment.Summary:Writer Derek Thompson (on X @ @DKThomp) argues the AI investment boom may be causing a form of Dutch disease in the US economyHe says the build-out is raising the cost of capital, chips, electricity and engineers, outbidding other sectorsThompson also says inflation is eroding household incomes and median wages have been declining for several monthsDutch disease refers to the Netherlands’ 1960s gas boom, which lifted the economy overall but hurt non-gas industriesThe ongoing surge in Treasury yields, partly linked to AI borrowing, and PepsiCo’s weak US volumes are consistent with parts of the argumentThe analogy has limits: it works through input competition rather than currency, and AI may eventually lift productivityThe boom in artificial intelligence investment may be inflicting a modern version of Dutch disease on the US economy, enriching one sector while raising costs for everyone else, according to writer Derek Thompson.In a Substack post, Thompson, a contributing writer at The Atlantic and co-author of the book Abundance, said he worried that the AI build-out was raising the cost of capital, chips, electricity and engineers, leaving every other sector that relies on those inputs to be outbid. At the same time, he argued, the typical American is seeing inflation erode their income, and he said median wages have been declining for several months.The term Dutch disease describes what happened to the Netherlands after the discovery of the vast Groningen natural gas field in 1959. The windfall lifted national income and the currency, but rising prices and a stronger guilder hurt manufacturing and other industries outside the gas sector. The Economist coined the phrase in the 1970s.There is evidence consistent with parts of Thompson’s argument. US 10-year Treasury yields reached a 24-year high this week, and Bloomberg cited a surge in corporate borrowing to finance AI investment as one of the forces behind the bond selloff, alongside heavy government borrowing and elevated energy prices. PepsiCo this week reported falling North American beverage volumes and lowered prices on snacks, a sign of a cautious consumer.The analogy has limits, however. Classic Dutch disease works largely through a stronger currency that undermines exporters, whereas the AI version, as Thompson frames it, operates through competition for scarce inputs. AI could also eventually lift productivity across the wider economy, a benefit a gas discovery never offered. Other forces are at work too, notably energy prices driven higher by the Iran war, which add to electricity costs and inflation independently of AI demand.Whether the diagnosis holds will depend on data still to come. Electricity prices, wage figures and the pace of AI-linked corporate bond issuance are the measures most likely to show whether the boom is crowding out the rest of the economy or eventually lifting it. This article was written by Eamonn Sheridan at investinglive.com.