Manias, panics and AI

[WASHINGTON, DC] In 1978, Charles Kindleberger published Manias, Panics, and Crashes, an instant classic history of investment booms and subsequent busts.

Such booms can be divided between those that end up building something useful (such as a railway system in mid-19th-century Britain, the United States and elsewhere); and those that do not (such as the Netherlands’ infamous 17th-century tulip mania and the subprime-mortgage madness of the early 2000s).

By any metric, the US and, by implication, the world, is now in an intense artificial intelligence (AI) speculative boom. But will all the investment pouring into the industry build something useful? To whom, and for what purpose? And if there is a downside, what will it look like?