Apocalyptic prophet Grantham warns of AI bubble: The carnival will eventually repeat the "railway tragedy"

Artificial intelligence technology is driving humanity towards a more efficient future, however, Jeremy Grantham, the co-founder of Boston GMO and a long-time doomsday prophet on Wall Street, holds a different view. He believes that like all world-changing technologies, artificial intelligence will ultimately collapse and harm the interests of investors. In the latest Merryn Talks Money podcast, Grantham compares the current booming artificial intelligence technology to the 19th century expansion of railways, calling it "one of the most spectacular failures," despite significant funds flowing into this network that has boosted GDP and productivity, "every truly important new technology has a bubble." The 86-year-old Grantham is known for making pessimistic predictions before stock market crashes, but recently his predictions have not been accurate. He once said that the post-pandemic stock market surge was "in many ways equivalent to the 2000 tech bubble," however, speculation in artificial intelligence disrupted the stock market decline. Grantham points out that the birth of ChatGPT injected much-needed capital into the economy in 2022 but warns that the industry will eventually crush small businesses, just as the internet did during its boom and bust periods. "The internet was clearly going to change everything, it attracted a lot of capital, gave birth to many internet companies, everything had an amazing explosion," Grantham said, "There is little as important as artificial intelligence. Of course, it will change our world. Of course, we cannot know how it will change and whether it will be entirely beneficial." Furthermore, Grantham also expresses concern about investors' enthusiasm for artificial intelligence and cryptocurrencies, believing that this is driving up tech stock valuations, but he warns investors not to be too optimistic. He bluntly states that bitcoin and cryptocurrencies "do not produce anything," "materially speaking, they are not a medium of exchange, but they have excellent speculative properties."