Will AI be a bust? A Wall Street sceptic rings the alarm

AS JIM Covello’s car barrelled up Highway 101 from San Jose to San Francisco this month, he counted the billboards about artificial intelligence (AI). The nearly 40 signs he passed, including one that promoted something called Writer Enterprise AI and another for Speech AI, were fresh evidence, he thought, of an economic bubble.

“Not that long ago, they were all crypto,” Covello said of the billboards. “And now they’re all AI.”

Covello, the head of stock research at Goldman Sachs, has become Wall Street’s leading AI sceptic. Three months ago, he jolted markets with a research paper that challenged whether businesses would see a sufficient return on what by some estimates could be US$1 trillion in AI spending in the coming years. He said that generative AI, which can summarise text and write software code, makes so many mistakes that it was questionable whether it would ever reliably solve complex problems.