Wall Street Is Officially Freaking Out That AI Might Destroy More Jobs Than It Creates

The honeymoon between Wall Street and AI might be over.

Both the S&P 500 and the Nasdaq finished February in the red, and a big reason is growing fear that artificial intelligence could hurt more companies than it helps. The mood shifted hard after Jack Dorsey's fintech company Block basically admitted that AI is disrupting its business in ways it didn't fully anticipate.

Nvidia, the company that makes the chips powering almost every AI system on the planet, saw its stock drop another 2.4% as investors started questioning whether even its massive growth can justify what people are paying for it.

But the scariest headline came from UBS, one of the world's biggest banks. Their analysts warned that if AI disrupts industries aggressively enough, default rates on private loans could hit 15%. That means companies borrowing money to stay afloat could start failing at rates we haven't seen since the 2008 financial crisis.

Think about it this way: AI is great if you're the one building it. But if you're a company that AI is about to replace, your bank loans suddenly look a lot riskier. And there are a lot more companies in the second category than the first.

The market is starting to price in a world where AI doesn't just create winners. It creates a whole lot of losers too.

As reported by CNBC and Bloomberg.

Source: CNBC