CNBC star Andrew Ross Sorkin has warned that the US economy could be on the verge of another Great Depression.
Sorkin said on 60 Minutes he is ‘anxious’ the country is currently in an economic bubble fueled by a technology boom that could soon crash.
‘I’m anxious that we are at prices that may not feel sustainable,’ Sorkin said.
‘And what I don’t know is, we are either living through some kind of remarkable boom – and part of that is artificial intelligence and technology and all of that – or everything is overpriced.’
Sorkin added: ‘Or we’re reliving [1929].’
The economics expert explained that it would take a few years to know whether Artificial Intelligence is a ‘gold rush’ or a ‘sugar rush’ for investors.
‘I think it’s hard to say we’re not in a bubble of some sort. The question always is, when is the bubble going to pop?’ Ross said.
‘I would argue to you the economy is being propped up – almost artificially – by the artificial intelligence boom.’
CNBC star Andrew Ross Sorkin Said on 60 Minutes he is ‘anxious’ the country is currently in an economic bubble fueled by a technology boom that could soon crash
Two men wearing sandwich boards advertising their willingness to find employment in Chicago during the Great Depression
Sorkin is the latest expert to warn that an AI-driven stock market bubble could be about to burst as Wall Street keeps setting records.
The S&P 500 climbed 0.4 percent to set an all-time high following mixed trading last week. The Dow Jones Industrial Average dipped 63 points, or 0.1 percent, while the Nasdaq composite rose 0.7 percent to its own record.
A frenzy around AI has been one of the main reasons Wall Street has been hitting record after record, though that’s also raising worries that prices have potentially shot too high.
Much of the recent buzz around AI in the US has come from OpenAI, which has quickly grown into a $500 billion company. It’s been announcing deals with businesses around the world to develop more AI infrastructure.
JP Morgan boss Jamie Dimon said he was ‘far more worried than others’ about the risk of a serious correction – suggesting it could even happen in the next six months.
The grim message, in an interview with the BBC, came after the Bank of England and IMF both raised concerns about inflated valuations.
They made comparisons to the Dotcom bubble, suggesting any sudden shift in sentiment could hammer global growth.
Dimon, who runs the US’s biggest bank, said a ‘lot of things’ were creating an atmosphere of uncertainty.
He pointed to risk factors including geopolitical volatility, fiscal strains on governments, and a remilitarization drive.
‘All these things cause a lot of issues that we don’t know how to answer,’ he said.
JP Morgan boss Jamie Dimon has also warned that an AI-driven stock market bubble could be about to burst
‘So I say the level of uncertainty should be higher in most people’s minds than what I would call normal.’
He suggested a correction could happen within the next six months to two years. ‘I am far more worried about that than others,’ he said.
Much of the surge in tech stock values has been driven by expectations that AI will revolutionize the economy and society.
But Dimon said it was ‘probable’ that some investors would lose money.
‘The way I look at it is AI is real, AI in total will pay off,’ he said.
‘Just like cars in total paid off, and TVs in total paid off, but most people involved in them didn’t do well.’
He added some of the money being invested in AI would ‘probably be lost’.
