Can AI break a 150-year trend without overheating

Ever since ChatGPT burst onto the scene three years ago, investors have either jumped on the artificial intelligence bandwagon or warned endlessly of yet another tech bubble.



The bulls are convinced that "this time is different" because AI is a macro transition rather than a micro valuation story, while the naysayers point to the risk of overheating.



Trillions of dollars of AI investment spending earmarked over the next five years hinge on a belief that a grand technological transformation of the entire U.S. - and likely global - economy is underway.



Doubters are reasonably skeptical about faith alone and are wary the returns will not justify that blistering spend - given lofty end-usage estimates, already sky-high valuations, creeping leverage and the inevitable minefield of winners and losers.



One way to take a view is to zoom the lens out as far as possible and see what it might mean for economic growth relative to history.



Strategists at the world's biggest asset manager BlackRock - still big believers in the AI story - did that as part of their annual outlook this week, which showed just how difficult it would be for even this sort of tech metamorphosis to knock the U.S. off the steady course it has mapped over a century and a half.