A latest Fed report confirmed some 30% of respondents felt a flip in sentiment in opposition to AI is a salient threat to the U.S. monetary system and the worldwide financial system.
Jefferson famous that investor enthusiasm for AI corporations comes in opposition to a backdrop of a monetary system that’s “sound and resilient.”
Additionally completely different from the speculative dot-com growth, he stated in remarks ready for supply to a Cleveland Fed convention, is that AI corporations haven’t to date relied closely on debt financing.
Restricted use of leverage “might cut back the extent to which a shift in sentiment towards AI may transmit to the broader financial system by way of credit score markets,” Jefferson stated.
If future investments in AI infrastructure require extra debt, as some analysts forecast, “leverage within the AI sector may increase-and so may the losses if sentiment towards AI shifts. I’ll watch this creating development intently.” Jefferson added that synthetic intelligence might rework the world in a dramatic and “bumpy” method, although it’s too early to inform with precisely what penalties for the labor market, inflation, and financial coverage
