Are We in an AI Bubble? Here’s How Directors Can Prepare

A short article by Nick Rockel for the marvelous and very useful National Assoc of Corp Directors featuring two smart people, Tom Petro and Andrea Bonime-Blanc, JD/PhD, plus me ...

Worth a quick read and if you are a board director or want to be, definitely sign up with the NACD (National Association of Corporate Directors).

The history of 'tech' causing economic shifts almost always exhibits a rapid growth pattern fueled by specualtion. That creates a bubble, which bursts/explodes. That creates damage. Out of the wreckage, you get a bigger, broader growth wave run on the economics of production/business not the economics of speculation. Also, not just in that sector but in the surrounding emerging ecosystem.

We are in the bubble phase but there are broader related questions/concerns for boards, as you will see in the article.

Railroads are a great example. A lot of people made a lot of money in speculation (e.g., Cornelius Vanderbilt). Then the bubble exploded, 1840s UK with a huge negative impact to middle class investors who were often 9X leveraged, and 1873 in the US, leading to the Long Depression and 25% of railway firms going under immediately.

Henry Ford's automotive breakthrough (1912) killed off 90% of the automakers and left 3 with 80% of the market and the other 37 fighting for scraps.

Carlotta Perez (Cantab), in my book, the top of the leader board for who deserves a Nobel in Economics but still doesn't have one, wrote the seminal analysis of that. What are the odds of Carlotta and me being wrong at the same time?

READ FULL ARTICLE HERE