Leading economist warns of 'significant bubble' in artificial intelligence

A prominent economist has cautioned that an artificial intelligence (AI) bubble is imminent, with the potential to cause widespread disruption. Prof Ha-Joon Chang, a distinguished Board Member of Qatar Foundation and renowned academic, made the warning during a talk at Hamad Bin Khalifa University. The economist, known for his expertise in global economics and his 17 acclaimed books, expressed concern over the rapid expansion of the AI industry and its potential consequences.

Prof Chang highlighted that the AI sector, like the Dotcom Bubble of the early 2000s, is experiencing a significant bubble. He cautioned that a burst of this bubble could have severe repercussions, potentially leading to the closure of numerous AI data centers and the loss of jobs in AI-related services. The economist emphasized that while AI can replace certain services, such as software coding and medical scans, it might not be able to perform complex tasks effectively.

In response, some countries may need to rehire human professionals in these areas, necessitating their readiness for this shift.

Addressing concerns about AI's potential dangers to humanity, Chang noted that the risks associated with AI are not unique and can be found in other technologies like fossil fuels and nuclear energy. He suggested that these concerns might be a strategic move by the AI industry to attract more investments. Despite the potential disruptions, Chang was cautious about the timeline and severity of the AI bubble's burst, stating that the situation is uncertain.