Joseph Stiglitz wants you to hold two ideas in your head at the same time. The first: An AI bubble is building; it will likely burst; it will hurt the macroeconomy; and workers will bear the cost of a displacement we have no institutions to manage. The second: Survive that transition and the technology that threatens your job today may end up becoming your most useful coworker.
“Our economy is right now being supported by AI investment—the AI bubble,” Stiglitz told Fortune in a recent interview. “Like, a third of the growth, or the non-growth, that we had last year was based on AI. So this AI bubble is having positive macroeconomic effects in the short run. I believe that it is a bubble in two ways.
“There’s both a short run and a long run,” he said. The problem, Stiglitz argued, is that almost everyone in the public debate is only hearing one of them.
If there’s a bubble, it will have an explosive burst
Stiglitz, who won the Nobel Prize in economics and wrote about the structural failures of modern capitalism in his 2024 book, The Road to Freedom: Economics and the Good Society, believes the current wave of AI investment rests on a foundation that cannot hold.
