Deutsche Bank's Jim Reid says AI could boost productivity, but measurable benefits may take years to materialize. He warns of a rally in semiconductor stocks and a risk of a big tech bust.
Deutsche Bank's Jim Reid said artificial intelligence will boost productivity significantly, but the measurable economic effects are likely years away.
Reid, who is global head of macro and thematic research at the bank's research institute, said in an interview with Bloomberg Television, "In my career I haven't seen anything like AI in terms of potential for productivity," and cautioned that firms will need time to integrate the technology before the gains appear.
He placed that caution against a backdrop of an unprecedented rally in semiconductor stocks that has raised questions about valuations and corporate spending, warning there is a risk of a big tech bust even as the current cycle looks inflationary.
Drawing on economic history, Reid said past breakthroughs have not reduced aggregate employment and pointed to his team's chart showing software jobs continue to grow.
He added that while AI could provide the productivity uplift needed to ease unsustainable public debts, a significant rise in long-term interest rates would counter that benefit and aggravate debt-sustainability problems.
