Goldman Sachs says history suggests most major technology revolutions lead to stock market bubbles, but artificial intelligence is not there yet.
In a new CNBC interview, Kim Posnett, the bank’s co-head of investment banking, points to a sweeping new equity research report that examined nearly two centuries of innovation cycles.
She says the long-term direction remains clear.
“A report that our equity research team just did… looked at 51 periods of major tech innovation over a 175-year period. They found that 75% of the time, that led to equity price bubbles.”
Despite the similarities, she says today’s AI cycle has not crossed that threshold.
“They also looked at the current environment. And despite many similarities, they found that we weren’t in an AI bubble yet.”
Possnett believes that AI will witness a sustainable uptrend over a long arc of time, but warns that the climb will not be smooth.
“I do think that the path will be up and to the right over time. I just don’t think it’ll be a straight line… When you’re allocating this amount of capital this quickly, you’re bound to have winners and losers.”
She adds that value distribution across the AI ecosystem remains uncertain and will take time to reveal itself.
Fellow banking giant JPMorgan Chase holds a similar view that AI is not in bubble territory. CIO Bob Michele recently said that companies are gearing up to scale AI, not fall back on it.
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