The AI Boom Isn’t Over — Here’s Why
Artificial Intelligence has dominated conversations in boardrooms, investment circles, and policy debates alike. With market valuations soaring and startups raising billions, some pundits have begun warning of an AI bubble. However, according to economist Dambisa Moyo, the AI rally may have more room to grow — and the real danger lies not in its current rise, but in how it matures.
On a recent episode of Merryn Talks Money, Moyo shared her insights on the nuances of the AI revolution, warning that although this emerging technology holds monumental promise, investors and governments need a more strategic and balanced perspective.
The Fundamentals Behind AI’s Ongoing Growth
Unlike past tech cycles driven by hype — such as the dot-com era — the AI revolution is underpinned by real, forceful shifts in how businesses operate and economies develop. Moyo explained that multiple structural factors help justify current valuations in AI:
- Secular demand: AI is addressing real-world problems across sectors — from medicine and finance to logistics and education.
- Productivity growth potential: Companies are seeing tangible efficiency improvements by integrating AI tools, especially generative AI.
- Labor market transformation: As AI automates routine tasks, there’s a growing demand for retraining and new skills — a structural pivot that fuels long-term investment strategies.
In short, the AI trend is not just speculative enthusiasm. It has deep, secular trends driving growth and evolving usage globally.
The Real Risk Lies in Uneven Development
While many are concerned about short-term bubbles and overvaluation, Moyo believes the more pressing danger is uneven development and deployment.
Widening the Global Digital Divide
As companies and governments in the Global North race ahead with AI, many emerging economies risk being left behind. Limited infrastructure, lower data availability, and slower skill development could further entrench global economic inequalities. Moyo warns that this imbalance could spark geopolitical tensions — especially if AI becomes central to national productivity.
Job Displacement Without Safety Nets
The threat of automation displacing workers is well-documented. However, Moyo points to the lack of sufficient government preparation as the real issue. Overreliance on the private sector to upskill workers might result in greater inequality and social discontent.
“If we don’t balance innovation with inclusion, we’re headed for a political and economic backlash,” she said during the podcast.
Investor Outlook: Hope Meets Hype
Despite uncertainties, capital continues to flood into AI startups and established tech leaders. The key challenge for investors, according to Moyo, is to separate the long-term innovators from short-term hype.
Red Flags to Watch For:
- Startups without sustainable revenue models
- Tech companies applying AI as a marketing gimmick rather than a core capability
- Overdependence on large language models without proprietary data advantages
Green Lights for Investors:
- Companies actively integrating AI into vertical supply chains
- Long-term investment in AI infrastructure and chip development
- Diversified global exposure, including AI innovation hubs beyond Silicon Valley
Conclusion: Preparing for the AI “Second Act”
According to Dambisa Moyo, we’re still in the earlier phases of the AI boom — and while there’s plenty of steam left in the rally, the more formidable risks lie ahead. The challenge is less about whether the AI bubble will burst, and more about how responsibly and inclusively the technology will scale.
To thrive in this period of transformation, businesses, investors, and policymakers must all balance innovation with regulation, and speed with sustainability.
As AI continues redefining industries and shaping global economies, those who stay informed and agile will be best positioned to capitalize on its potential — while minimizing the fallout of its risks.
Leave a Reply