The race to develop artificial general intelligence (AGI) is characterized as an all-pay auction, where all participants incur costs regardless of winning or losing. This competitive environment leads to a phenomenon known as value dissipation, where the total expenditure on the race approaches the value of the prize itself. The stakes are extraordinarily high, with the potential for monopoly-like profits across various sectors, driving companies to invest heavily in their pursuit of AGI. Notable examples include Microsoft projecting over $30 billion in capital expenditures in a single quarter and Alphabet aiming for $85 billion by 2025. Such immense financial commitments reflect a rational strategy in a winner-takes-all scenario, where cutting back on investment could result in losing the race and previous investments. The dynamics of this unprecedented competition create a landscape marked by rapid depreciation of assets and intense pressure on private financing, as companies race to acquire GPUs and build data centers. The lack of a clear definition or end goal for AGI exacerbates the situation, leading to overbidding and insufficient returns on investment. While the potential for significant advancements exists, the economic implications of this race could lead to a bubble, where most of the value generated is consumed by the competition itself. Ordinary investors and pension holders may find themselves disproportionately affected if the majority of bidders incur losses while only one emerges victorious. The article outlines several potential outcomes for this all-pay auction, including clearer definitions of AGI that could stabilize investment, the emergence of a decisive leader that prompts others to withdraw, or the fragmentation of the prize into multiple niches that reduce overall waste. Furthermore, budget constraints and external factors, such as policy changes or limitations in power supply, could also influence the dynamics of this race. The development of AGI remains uncertain, and should it be deemed unattainable, the consequences of these massive investments could reverberate throughout the economy, emphasizing the need for a nuanced understanding of both the technological and financial landscapes involved in this high-stakes competition.