Making Financial Headlines · Page 9
An AI Downturn Might Not Give Workers a Breather
· New York time
Research on past recessions suggests that downturns can accelerate automation, raising the possibility that an AI bubble bursting could also intensify job losses. This is a risk scenario, not a statement that such a collapse or employment outcome is inevitable. The counterintuitive mechanism matters: less enthusiasm in financial markets need not mean less pressure to replace tasks. Businesses confronting weaker conditions may look harder for ways to reduce costs, even as technology valuations fall. That separates the fortunes of AI investors from those of workers affected by AI adoption. Their difficulties could overlap rather than cancel out. The comforting story would give everyone a pause when the hype subsides. Economic history suggests the pause button may instead be connected to the cost-cutting menu.
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