Barclays Says at the WEF There’s Unlikely to Be an AI Bubble

As global leaders gather in Davos for the annual World Economic Forum (WEF), senior economists are offering reassurance to investors watching the rapid rise in AI spending. According to Christian Keller, Head of Economics Research at Barclays Investment Bank, the current surge in AI investment appears fundamentally different from past market manias and is unlikely to end in a sudden collapse. 

Keller, speaking on a WEF podcast, noted that AI is already delivering tangible gains in productivity, a factor that helps explain elevated valuations across the technology sector. He pointed to a broader backdrop of geopolitical strain and a more fragmented world economy, set against the growing optimism surrounding AI’s long-term economic potential. 

Keller noted that this contrast has led some observers to question whether technology stocks could face a sharp correction. However, he argued that investors remain relatively calm since the present cycle does not mirror the excesses seen during the late-1990s internet boom. 

At that time, he noted, heavy borrowing fueled speculative investment. Today’s leading technology firms, by comparison, tend to be mature businesses with strong revenues, established products, and large cash reserves. 

Keller added that even if markets were to pull back, the wider economy would still benefit from the physical and digital infrastructure created during the investment phase. Expanded data centers, faster networks, and improved computing capacity would remain in place, supporting future innovation regardless of short-term market moves. 

He also stressed that the reach of the technology sector extends far beyond those who actively trade tech shares. Many people who believe they have little exposure are indirectly affected through pension funds or diversified investment vehicles. Given the dominant position of U.S. equities in global markets and the heavy weighting of a small group of large technology companies, shifts in tech valuations tend to ripple across portfolios worldwide. 

This year’s forum marks its 56th Annual Conference and is the largest on record. Around 400 senior political figures are attending, including approximately 65 heads of state. They are joined by nearly 850 chief executives and board chairs, alongside close to 100 fast-growing technology firms and start-ups. 

Debates at the event are focused on fostering cooperation in an increasingly divided world, investing in people, finding new drivers of economic growth, ensuring innovation is used responsibly, and promoting shared prosperity. 

AI is expected to feature prominently throughout the week, particularly in debates around its governance and long-term economic impact. Tech firms like Core AI Holdings Inc. (NASDAQ: CHAI) will be tracking how the discussions progress and shape the way the world looks at emerging technologies. 

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