In his keynote talk to 500 investors at the Council for Institutional Investors annual meeting in Boston two weeks ago, Gary Gensler highlights the market and economic risks of the current AI capital expenditure boom.
After setting the context of today’s capital markets — high stock market valuations, rising bond yields, persistent inflation, unsustainable federal deficits, energy price shocks, and the US stepping back from decades of global leadership — Gary details why we’re likely to have a market retrenchment on the horizon.
The history of general-purpose technology investment booms and related bull markets are that we eventually experience reversals – with only the timing, depth and reach being uncertain.
Whether due to an AI investment plateau or decline – or geo-political or other exogenous shock – market valuations, debt levels, financial stability, and the economy will be tested.
As Warren Buffett famously put it: “When the Tide Goes Out, We’ll See Who’s Been Swimming With Their Trunks Off”
Watch the full talk at ‘The AI Trade’.