Within a few years, artificial intelligence will displace a significant portion of the world’s highly paid knowledge workers. Aggregate demand will suffer, but flows into retirement investment accounts will turn net-negative: workers won’t just stop paying in, they will need to withdraw funds.These outflows will come largely from passive investment funds, particularly S&P 500 index trackers. Although such redemptions involve selling every constituent in proportion to its index weight, the price impact will not be evenly distributed. The AI “mega-caps” that have powered the index higher, such as Nvidia, Microsoft and Amazon, are also the names whose valuations have been most dependent on mechanical passive inflows as the marginal buyer. The result, ironically, is that the companies powering the AI revolution are likely to suffer the largest price drops.The EconomistSubscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? Fetching latest articles