On October 7, we published an article titled “Jamie Dimon Just Put a Price Tag on AI Risk – Markets May Have to Curb Their Enthusiasm.” At the time, the warning sounded like a challenge to one of Wall Street's most powerful investment narratives. Three weeks later, investors are beginning to discover why the chairman of JPMorgan Chase was concerned.
The artificial intelligence revolution may eventually transform the global economy. But revolutions are expensive, and the companies financing this one are discovering that enthusiasm cannot replace cash flow. On Friday, October 30, Reuters reported that more than $2 trillion in market value was at risk of disappearing from the Nasdaq 100 during October. The index had fallen more than 5.8% for the month as investors reassessed the enormous sums being committed to artificial intelligence infrastructure. The immediate problem is not that AI has stopped attracting investment. It is that the investment requirements keep growing while the financial returns remain uncertain.
