Nobel Laureate's Warning Dampens Global Markets: "AI Boom Is a Bubble... Economic Shock If It Bursts"

Nobel Laureate Stiglitz Warns

One-Third of U.S. Growth Driven by AI Investment

Profit Could Drop to 'Zero' as Competition Intensifies

Skeptical About AI Replacing Jobs in Teaching and Healthcare

Joseph Stiglitz, Nobel Prize-winning economist and professor at Columbia University, has warned that the ongoing investment boom in artificial intelligence (AI) may be an unsustainable "bubble." He also argued that projections of AI massively replacing human jobs are exaggerated.

Joseph Stiglitz, Professor at Columbia University. Photo by Yonhap News Agency

In an interview with the U.S. business magazine Fortune on March 8 (local time), Stiglitz stated, "The current U.S. economy is being propped up by AI investment—in other words, an 'AI bubble.'"

Stiglitz analyzed that "about one-third of last year's economic growth was driven by AI-related activities." While he acknowledged that this trend could have a positive short-term impact on the economy, he pointed out that it is structurally characterized by bubble-like qualities.

He particularly viewed the market's expectation that AI technology will generate enormous profits in the near future as excessively optimistic.

Stiglitz cited the fact that market expectations are based on the assumption that some AI companies can monopolize huge profits, but in reality, the competitive landscape is much fiercer. He explained that, with not only major U.S. tech companies but also Chinese firms entering the competition, profitability could decline.

He further noted, "Even with technological success, intensified competition may leave little profit remaining," suggesting it could be difficult to achieve the returns the market expects. He expressed concern that if this investment frenzy collapses, it could cause significant short-term shocks to the macroeconomy.

Stiglitz also drew a line regarding predictions that AI will eventually replace human jobs in the long term. He believes that while AI could impact structured office work such as research, analysis, and administrative tasks, it will be difficult to replace fields like education and healthcare or blue-collar jobs such as plumbing. For example, AI could help with lesson planning but cannot replace teachers. "We know a great deal about how students learn, and human interaction is fundamental in education," he emphasized.

He also pointed out that inefficiencies in the U.S. healthcare sector cannot be solved by technology alone. He argued, "The problems in healthcare stem from political and institutional factors such as rent-seeking, lack of competition, and the absence of a public healthcare system," and questioned, "Can AI resolve these political issues?"

Stiglitz added that for jobs like plumbing, AI may be able to assist with tasks, but it remains very difficult to fully replace human labor itself.

He suggested that the future of AI should be seen not as a technology that replaces jobs, but as an "IA (Intelligence Assisting)" tool that augments human capabilities. However, he stressed that if a short-term bubble bursts in a context where social safety nets, retraining programs, and the government's policy response capacity are lacking, even a future centered on "IA" will be hard to realize. He added that the transition period between the present and the future is the most dangerous time.

This content was produced with the assistance of AI translation services.