"The risk of a sharp market correction has increased,"
"equity market valuations appear stretched, particularly for technology companies focused on artificial intelligence."
"Should expectations around the impact of AI become less optimistic,"
"one big bet on AI."
The risk of a sharp market correction has increased. Equity market valuations appear stretched, particularly for technology companies focused on artificial intelligence. If expectations around the impact of AI become less optimistic, markets could be particularly exposed. Analysts estimate the current AI-driven valuation boom is many times larger than previous bubbles, raising systemic contagion concerns. AI companies face difficulties generating sufficient revenue to cover high expenses, and only a small share of AI pilot programs produce rapid revenue acceleration. Generative AI is estimated to account for a large share of US economic activity, and some observers characterize the US economy as effectively one big bet on AI.
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