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Are We on the Brink of an AI Investment Arms Race?

bridgewater.com · 3,770 words · saved by 1 readers

While AI-related investment isn’t yet a major driver of economic growth, it looks poised to rise rapidly from here—with the potential to shape the business cycle well before AI is in widespread productive use. It may feel like a bubble now (and there are some frothy aspects), but we are likely still in the very early innings. At some points in history, we experience a technological breakthrough big enough to change the way that we go about our day-to-day lives. In most cases, it takes many years for society to adapt to the new technology and to figure out how to reap its benefits. However, the combination of excitement around its potential benefits and fears of becoming obsolete can spark intense competition to get ahead. That competition can pull forward the expected future growth associated with the technology by creating a surge in investment in the near term. We believe AI is likely on that path. We have been studying AI for over a decade, both as macro investors interested in its

May 20, 2024 By Greg Jensen , Josh Moriarty Share Twitter LinkedIn While AI-related investment isn’t yet a major driver of economic growth, it looks poised to rise rapidly from here—with the potential to shape the business cycle well before AI is in widespread productive use. It may feel like a bubble now (and there are some frothy aspects), but we are likely still in the very early innings. At some points in history, we experience a technological breakthrough big enough to change the way that we go about our day-to-day lives. In most cases, it takes many years for society to adapt to the new

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