Media Contact
Adam Allington
The Bank of England has warned there is a growing risk of a “sudden correction” in global markets as it raised concerns about soaring valuations of leading AI tech companies.
Karan Girotra
Professor of Operations, Technology and Information Management
Karan Girotra is a professor of operations, technology, and innovation at Cornell Tech, as well as a professor of management at the SC Johnson College of Business. He says AI remains a key driver of the increasing valuations of private and public companies, and there is no reason to think that will stop any time soon.
Girotra says:
“I don’t see an immediate AI-driven crash on the horizon. We could keep riding the AI train for a bit. This time is different than previous investment booms for several reasons.
“The AI sector is on more solid ground than previous booms— as we have real revenues/profits, very strong consumer adoption, and a continually improving and investment hungry technology. The enterprise adoption is just starting and already moving faster than with other tech cycles.
“At all levels, there are several players with deep pockets and major FOMO— who think they can’t afford to be left out. Big Tech companies like Meta, as well as countries like the U.S and China: These actors are driven by considerations that go beyond financial returns on AI investment. That is, the CCP isn’t going to slow developing AI capabilities, just because the stock markets have a bad week. All of this would suggest we won’t have a big crash, like with the dotcom boom.”
