{"id":73987,"date":"2025-08-16T11:37:06","date_gmt":"2025-08-16T11:37:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/73987\/"},"modified":"2025-08-16T11:37:06","modified_gmt":"2025-08-16T11:37:06","slug":"investors-beware-the-ai-revolution-could-be-a-dud","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/73987\/","title":{"rendered":"Investors beware: The AI revolution could be a dud"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

China and the U.S. currently dominate AI research but seem to be taking very different approaches to the technology.Go Nakamura\/Reuters<\/p>\n

John Rapley is a contributing columnist for The Globe and Mail. He is an author and academic whose books include Why Empires Fall and Twilight of the Money Gods.<\/p>\n

Consider this. An AI<\/a> chatbot uses 200 million times more energy than the human brain to perform the tasks it does. Once done the task, the human owner of the brain can then, if he or she so chooses, cook dinner, pick up the kids, run a triathlon, play music, write a letter, unplug the drain, shop for clothes, paint the fence \u2013 you name it. But the AI chatbot can simply run variants of the same task.<\/p>\n

So why is so much money being sunk into a technology when we already have a cheaper, far more versatile one? The answer is that AI can do specific tasks quicker \u2013 sometimes much quicker \u2013 and more accurately than the human brain could ever do. If only good at one thing, it can nonetheless be very good.<\/p>\n

We\u2019re starting to see the benefits of this in, for instance, medicine and pharmaceutical research, where doctors can now produce faster and more accurate diagnoses<\/a> and researchers can speed up the pace<\/a> of experimental research. Similarly, accountants and lawyers are now able to hand tasks like preparation of briefs or spreadsheets, improving their productivity while reducing their need for labour.<\/p>\n

The progress isn\u2019t always linear, though. Research has found that doctors using AI to perform diagnostics tend, on average, to lose diagnostic skills<\/a>. Smarter machines can make for dumber people so for now, at least, AI outputs need to be verified by humans<\/a>. Nevertheless AI could automate some tasks while enhancing human performance in others, so its potential seems considerable. <\/p>\n

The stock market is booming. Our economies are busting. What\u2019s going on?<\/a><\/p>\n

Opinion: Without AI guardrails, sci-fi nightmares about killer robots could come true<\/a><\/p>\n

Of the two countries that currently dominate AI research, accounting for the vast bulk of spending, China seems to be opting for this approach. The country is rapidly finding practical applications using \u2018good-enough\u2019 technology, and the effects are showing up in everything from AI turnstiles on public transit to factory robots.<\/p>\n

But the U.S., which accounts for two-thirds of the world\u2019s spending on research, is going in a different direction. The revolution there is being led by Silicon Valley visionaries who want to go well beyond \u201cgood enough.\u201d Determined instead to reach their Holy Grail of artificial superintelligence, their dream is to in effect build a better human \u2013 an AI model that can do everything a human brain does in the way of reasoning and creation, but better and faster.<\/p>\n

It\u2019s a highly speculative bet but one investors are, so far, willing to bankroll. The Magnificent Seven companies in the vanguard of the revolution have announced plans to spend hundreds of billions of dollars developing new chips, building data centres and developing applications. <\/p>\n

Investors are matching their enthusiasm, bidding the share values of the Mag7 so high that Nvidia alone is now worth almost a tenth of the total value of the US stock market. Retail investors are throwing caution to the wind to join the gold rush, with margin debt at record levels, up 25 per cent<\/a> in the last year alone.<\/p>\n

But as time passes, the risks attached to this bet grow ever more evident. It\u2019s now nearly three years since the launch of ChatGPT fired the starting gun on the AI revolution, yet still we lie in wait for any evidence AI will significantly raise output. <\/p>\n

On the contrary the growth of labour productivity<\/a> remains as sluggish as it\u2019s been for years, with few signs yet that the widespread adoption of AI \u2013 Americans prompt ChatGPT more than 300 million<\/a> times a day \u2013 is doing anything to make most workers more productive.<\/p>\n

And because AI is sucking in a sea of capital, there\u2019s little left for everyone else, the result being that investment in the rest of the economy is now declining<\/a> and corporate earnings<\/a> outside the Magnificent Seven are largely stagnating. <\/p>\n

Meanwhile AI\u2019s insatiable appetite for energy is driving up electricity prices<\/a>, helping to keep inflation from falling. Not only does that put pressure on interest rates, but it forces spending on other activities to fall. Reflecting this slowdown on Main Street, the economy is decelerating \u2013 so much so that the Trump administration is now openly mulling suspending economic reports so that Americans can\u2019t hear about it.<\/p>\n

The AI revolution is real and is already proving transformative. But whether it will justify the current spending under way in the U.S. is another matter. Equally, whether the American or Chinese model wins the future is now an open question. <\/p>\n

The Trump administration is going all in on the tech bro evangelism, lifting as many controls<\/a> as possible to facilitate its vision. <\/p>\n

If the bet pays off, Donald Trump<\/a> will be remembered as the president who ushered in the next American revolution. But if it fails, millions of Americans will have lost a fortune and the economy will have been set back. <\/p>\n

That\u2019s quite the bet indeed.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: China and the U.S. currently dominate AI research but seem to be taking…\n","protected":false},"author":2,"featured_media":73988,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,901,276,277,888,902,879,877,903,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-73987","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-alberta","tag-artificial-intelligence","tag-artificialintelligence","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/73987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=73987"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/73987\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/73988"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=73987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=73987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=73987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}