The MSCI World Stock Market index rose by 7.7% in the first quarter of the year, dragged by the S&P500 index on Wall Street, which exceeded its record 22 times in the January/March period; and within them, Nvidia – the company channeling the current artificial intelligence (AI) boom – increased its value by more than $1 billion in the first three months of the year, 1/5 of the companies’ total profits . global stock markets.
What began as a boom in US high-tech assets expanded globally during the first quarter, first in Europe and Japan, and now includes all types of advanced capitalist stocks and corporates, in a sign that the ‘Artificial Intelligence is the technology of the time.
The case of Nvidia is more than surprising: on a single day in January its capitalization increased by over 277 billion dollars; and at this rate it would become the most valuable company in the global system, above Amazon, Apple and Microsoft in the second quarter of 2024.
Wall Street’s calculation is that, based on precedents from the 1950s and 1980s, the current AI boom could last 20 years or more, extending to 2033.
Behind this phenomenon lies an extraordinary demand for AI chips and servers everywhere and simultaneously, which indicates that this technology is the main tool of the fourth industrial revolution, which is the complete digitalization of the global system and which characterizes the 21st century today. capitalism.
One of the leading Wall Street consultancies (ARK Invest) pointed out that the massive emergence of artificial intelligence can increase global output by 40 trillion dollars in the next 10 years, implying that “…every industry will be transformed, and each” of the companies of the international system, each of the innovation platforms being catalyzed at the same pace, typical of a real frenzy, which would even surpass electricity or the Internet.”
These exceptional perspectives respond to a structural, ongoing phenomenon. The case of Nvidia is indeed instructive: it would take 4,500 years of its future dividends to reach current asset prices.
This means that, like all booms in the history of capitalism, from the discovery of gold in California, to the price of tulips in Holland to the dot.com explosion in 2000, they are characterized by extraordinary uncertainty due to the fact that at the at the same time a general collapse of the status quo everywhere.
The logic of the stock market boom caused by artificial intelligence is as follows:
D A new production paradigm has emerged, which is the main general technology of the current stage of capitalist development, the fourth industrial revolution.
D. Schumpeter warned that the accumulation of capitalism is a successive process of great industrial revolutions, culminating in the financing of gigantic stock market booms; which take place in phases of great turbulence and uncertainty; and all this happens in a climate of technological euphoria, defined by Alan Greenspan as “irrational exuberance”.
D Also necessarily, these phases are of enormous cultural change because all social, political and managerial practices must be adapted to the new technical-economic paradigm; and this is part of a process of phenomenal economic growth, involving the emergence of new industries and the total rejuvenation of old businesses, with the extremely painful elimination of generations of consultants, technicians and countless management networks.
D This is what is happening now: a capitalist revolution is underway, which of course is led by the United States, the power that brings the miracle of technology and innovation to the world, and where, therefore, the future of the world comes First .
This coincides with a decisive year in North American history, in which presidential succession is at stake in the November 5 elections.
The brilliance of the American economy, with its extraordinary capacity for job creation and its unparalleled drive for innovation and creativity, paradoxically coincides with a period of extraordinary geopolitical weakening on a global scale, centered on extreme polarization and infamous and growing power vacuum in Washington, fundamentally embodied in President Joe Biden, who is one of the weakest leaders in the country’s two hundred year history.
This is what makes the world situation extremely risky, especially in the relationship with the other superpower of the time, which is the People’s Republic, which further increases the structural uncertainty of this part of world history.
The boom of artificial intelligence and the weakening of North America are the potentially explosive combination of the 21st century.
Source: Clarin
