AI will eventually lead to a more extreme society of haves and have-nots [Video]

The discussion these days is all about whether artificial intelligence will lead to a surge in productivity, lower inflation, higher economic growth, better living standards and value creation. The stock market seems to think so, as the shares of many AI-related companies have surged.

This is leading many to believe that a bubble is forming. Such bubbles are not atypical. A 2018 paper published in Marketing Science titled Two Centuries of Innovations and Stock Market Bubbles shows that groundbreaking innovation tends to be linked to bubbles in the stock prices of companies commercializing innovation. Those investors who remain overallocated to an innovative company after the bubble has ended suffer the effects of long-term reversals.

My sense is that AI will not improve productivity as much as markets expect. I tend to agree with Nobel Prize winner Daron Acemoglu, who believes that the AI-related frenzy will eventually lead to a tech crash that will leave everyone disillusioned with the technology.

Historically, new technologies have …