How AI Turbocharged the Economy (For Now)

Machines Like Us

If you listened to our last couple of episodes, you’ll have heard some pretty skeptical takes on AI. But if you look at the stock market right now, you won’t see any trace of that skepticism. Since the launch of ChatGPT in late 2022, the chip company NVIDIA, whose chips are used in the majority of AI systems, has seen their stock shoot up by 700%. A month ago, that briefly made them the most valuable company in the world, with a market cap of more than $3.3 trillion.

And it’s not just chip companies. The S&P 500 (the index that tracks the 500 largest companies in the U.S.) is at an all-time high this year, in no small part because of the sheen of AI. And here in Canada, a new report from Microsoft claims that generative AI will add $187 billion to the domestic economy by 2030. As wild as these numbers are, they may just be the tip of the iceberg. Some researchers argue that AI will completely revolutionize our economy, leading to per capita growth rates of 30%. In case those numbers mean absolutely nothing to you, 25 years of 30% growth means we’d be a thousand times richer than we are now. It’s hard to imagine what that world would like – or how the average person fits into it. Luckily, Rana Foroohar has given this some thought. Foroohar is a global business columnist and an associate editor at The Financial Times. I wanted to have her on the show to help me work through what these wild predictions really mean and, most importantly, whether or not she thinks they’ll come to fruition.

Mentioned:

“Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity” by Daron Acemoglu and Simon Johnson (2023)

“Manias, Panics, and Crashes: A History of Financial Crises” by Charles P. Kindleberger (1978)

“Irrational Exuberance” by Robert J. Shiller (2016)

“Gen AI: Too much spend, too little benefit?” by Goldman Sachs Research (2024)

“Workers could be the ones to regulate AI” by Rana Foroohar (Financial Times, 2023)

“The Financial Times and OpenAI strike content licensing deal” (Financial Times, 2024)

“Is AI about to kill what’s left of journalism?” by Rana Foroohar (Financial Times, 2024)

“Deaths of Despair and the Future of Capitalism” by Anne Case and Angus Deaton (2020)

“The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade” by David H. Autor, David Dorn & Gordon H. Hanson (2016)

Further Reading:

“Beware AI euphoria” by Rana Foroohar (Financial Times, 2024)

“AlphaGo” by Google DeepMind (2020)