Not only has AI become a significant part of many of our lives, it has also become intertwined with industry and, in recent years, a massive part of the US economy.

Huge amounts of investment are being pumped into the technology, with the hope that one day it will not only respond to our complaints, design our social media strategies, and answer our inane study questions – it will become a big part of our medical, scientific, and tech research, innovation, and development too.

The benefits to our species and societies would be unprecedented – in theory, anyway. Because there are countless risks and caveats to AI too.

Nevertheless, investment continues, with AI stocks continuing to shoot up. This reality, however, has become an increasing concern to many.

This concern is undoubtedly warranted, since a sudden burst of the AI stock bubble could wreak havoc not only on Wall Street but on economies and societies worldwide.

However, according to a recent report from macroeconomic researcher Dean Baker, this risk might not be all it is purported to be – with potential benefits if the AI bubble were to burst too:

“The immediate impact of the collapse of the AI bubble will undoubtedly be negative, but there are reasons to still think it would be good for the economy and for most workers.”

How could potentially recession-invoking stock crashes be good for workers? Well, inflation has been soaring while wages fail to keep up, whilst the majority of income has been hitting the pockets not of the workers, but the richest among our societies.

If an AI-related recession hit, Baker explains, the resulting crashes and unemployment could actually lead to lower interest rates and (on the surface, counterintuitively) increased governmental spending – two things that could actually benefit ordinary workers though additional subsidy for healthcare and childcare.

With additional job creation in these industries, and a relative increase in the money that workers have for spending, the economy would eventually receive a boost, thus leading to more jobs and, potentially, greater prosperity for the many.

But the operative word there is potentially. That’s because this would all be dependent on politicians making choices that would benefit workers and the economy, rather than propping up the super-rich:

“But this is a political obstacle, not an economic one. The collapse of the AI bubble will create the room the economy needs for policies that would make the lives of tens of millions of people far better. This is why we should all be fans of the collapse and not worry that we are cheering against the home team. For the vast majority in this country, the stock market is not the home team.”

With this in mind, the collapse of AI-stocks may not be the disaster that many are projecting – if politicians can be trusted to make the right choices, that is.

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