Journalism of Courage
The stock market boom and the attached volatility in the United States has raised concerns over the artificial intelligence-related rally and the AI bubble created thereafter, as companies like Meta have poured money in AI which has led to concern that these companies could be over valued, said journalist Fareed Zakaria during his show ‘GPS’ on CNN.
Zakaria raised questions to Ruchir Sharma, chairman of Rockefeller International as he asked whether America’s stock market is heading for a crash and what would it mean for the ordinary people.
While posting the conversation on social media, Zakria wrote, “Most bubbles eventually burst, and American tech companies’ gold rush to AI is likely no exception. What happens to the economy when America’s AI bubble bursts?”
Ruchir Sharma, while responding to the questions, said, “We need to first understand how we define the bubble…There are four ‘O’ of a bubble: One is that typically, like in a bubble, you end up getting overvaluation…if you look at historically the stock market valuation today is very expensive.”
Continuing his take on the bubble, Sharma said, “The other three big O’s that we will speak about, one is overinvestment. They’re typically in bubbles. What you find is that people invest a lot of money in just one theme.”
Mentioning about the money being poured into AI, he added, “Today if you look at the amount of money going into AI, the tech spend. As a share of the economy today, that’s already comparable to what you saw at the peak in the 2000 internet boom and also other big bubbles.”
The chairman of Rockefeller International further told Fareed Zakaria that AI bubble is the “most hated bubble in history” as he stated that “people are really scared about what AI may bring, because even the techno optimists who are embracing AI, they are saying that we’re going to take your job away.”
