Artificial Intelligence: A Determining Force in the Future of the Global Economy?

The Impact of Artificial Intelligence on the Economy

There is an increasing reliance on artificial intelligence to solve many global economic problems. However, this trust is not limited to stock market rises. Ruchir Sharma believes that artificial intelligence has the potential to provide solutions to various economic challenges. In particular, it is stated that the unique cycle of immigration and economic contraction in the United States makes these developments even more critical.

Immigration and Economic Contraction

In 2023, the U.S. is expected to gain over 3 million immigrants, but this number is predicted to drop to 400,000. This situation could lead to a significant contraction in the labor force, potentially reducing America's economic growth potential by 20%. Sharma emphasizes the importance of this discussion by stating, “Artificial intelligence will make human labor less necessary.”

Debt and Productivity

The U.S. public debt to GDP ratio has already reached 100%, and this ratio is expected to increase over time. However, Sharma argues that productivity gains made possible by artificial intelligence could help manage the debt. Additionally, it has been observed that bond yields have started to rise in countries like Japan, France, and the United Kingdom.

Inflation and Labor Issues

Artificial intelligence may allow companies to raise wages while keeping prices stable. This can lead to a reduction in inflation risks associated with tariff-related pressures. According to estimates from the U.S. Congressional Budget Office, productivity gains could potentially help keep public debt at 113%.

Market Reflections

Investors are strengthening their expectations that the strong narrative surrounding artificial intelligence in the U.S. will enhance the country's economic performance. For instance, foreign investors directed $290 billion into U.S. stocks in just the second quarter. At the same time, it is noted that non-artificial intelligence European markets are performing better.

Future Predictions and Bubble Threat

Analysts expect the rise in artificial intelligence stocks to continue, but some are concerned that this could create a stock market bubble. Analysts like Julian Emanuel indicate that the likelihood of the S&P 500 index reaching 9,000 points by the end of 2026 has increased.