AI Has Rocked the Stock Market, But What Will It Do for the Economy?
For all the excitement, evidence of a boost to productivity is still thin on the ground
Illustration: Matija Medved for Bloomberg
For investors in artificial intelligence, the last week delivered a painful shock. The sudden appearance of DeepSeek — a Chinese AI firm boasting a world-class model developed at bargain-basement costs — triggered a massive selloff in Nvidia and other US tech champions.
What matters for the economy, though, is not the ups and downs of stock prices for the Magnificent Seven, but whether AI drives gains in productivity, and how those gains are divided up. For all the excitement, and the trillion-dollar valuations for AI firms, evidence of a boost to productivity remains thin on the ground.