AI’s Beneficial Disruption: Lower Costs, Lower Inflation
AI is not a doomsday device. It’s a boon for the stocks of firms with high barriers to entry due to large capital investment. Eventually, as inflation comes down, bonds will benefit too.
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Artificial intelligence will undoubtedly reshape business and the broader economy—but not in the apocalyptic way some predict. Over time, AI-driven efficiency will push costs lower and help ease inflation. That dynamic favors industries with high barriers to entry, supports the bond market, and ultimately benefits consumers.
Dystopian scenarios around the disruptive effects of AI on a swath of businesses and jobs are roiling markets. Monikers such as SaaSpocalypse to denote the alleged demise of software as a service are testament to the fear currently gripping investors. I’m skeptical.