The End of AI Exponentiation: Fluttering Inside and Outside AI Bubble

arXiv:2609.05894v1 Announce Type: new Abstract: The exponentiation of Artificial intelligence (AI) in the recent past has entered a transformative era that has been driven by the growth in large language models (LLMs), large-scale compute infrastructures, and autonomous reasoning systems. However, the rapid acceleration of AI has increasingly shown technological, societal, economic, ethical and infrastructural challenges associated with peak data limitations, rising computational demands, synthetic data recursion, valuation inflation, and societal instability. The traditional scaling paradigms that have powered the modern AI systems are gradually encountering friction in sustaining continuous exponential growth. This paper views ``the end of AI exponentiation,'' thus exploring how it flutters inside and outside the bubble, where instability emerges within the AI ecosystem through compute and data-center races, speculative investments, and the rat-race toward superintelligence, and outside the ecosystem through labor disruption, governance concerns, public uncertainty, and geopolitical acceleration surrounding future intelligent systems and infrastructures globally.