Moses Ventures founder Danny Moses says he’s keeping a close watch on the impact of artificial intelligence in the economy.
In a new Bloomberg interview, the Big Short trader says strong earnings have lifted equities so far.
But he notes that he’s starting to see an unsettling trend emerging in the labor market, which he believes could be the catalyst that starts a new market correction, or worse.
“I think it’s employment, unemployment. So earnings have been strong enough, I think, to carry the market. I think we’ve had a broadening out within the market, which has been healthy in sectors other than tech, which is great. But I think you’re starting to see trends, potentially, in employment.”
Data from the Federal Reserve shows that the US unemployment rate has been creeping up since it bottomed out in April 2023 at 3.4%. As of January, it stands at 4.3%.
Moses mentions the viral Citrini AI report, which laid out a scenario where the unemployment rate climbed to 10.2% as AI exceeded expectations. While Moses says it’s ultimately a think piece, he notes that there may be some truth to the thesis, especially after Jack Dorsey reduced Block’s headcount by 4,000.
“You have to imagine what can happen. So you get all the benefits of being efficient as a company, and your margins improve, so you get that now. But we saw already from Block and what was said, firing 40% of their staff… So those are white-collar jobs. And so that’s in the economy.”
According to Moses, CEOs of publicly traded companies are now likely thinking of going the same route with AI and employment.
“You’re a publicly traded company. You have shareholders. Your job is for margin expansion and to produce earnings. If you see the opportunity to do it, it’s not a nonprofit, you’re gonna do it.
And so there’s no question that these tools, if you believe the AI secular trade is real, which obviously it is, it’s kind of an impact, and you’re pro Nvidia and you’re pro all this stuff, then you have to believe there’s an end user case for it, both in the consumer and company-wise. And so that’s the case, by definition, you’ll be more efficient.”
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