A Central Bank Just Told AI Investors the Math Might Not Work

A new BIS paper argues AI could deliver much lower long-run GDP growth than expected, because the profits generated may be insufficient to fund the next wave of innovation — a direct challenge to the productivity-boom thesis.

Amid a week of capability announcements, the most contrarian signal came from an unlikely source: the Bank for International Settlements. A new BIS paper, flagged by @econcallum, points to "MUCH lower GDP growth in future from AI due to insufficient profits to fund innovations." For an industry that has spent two years justifying historic capital expenditure on the promise of transformative productivity gains, this is a direct shot at the underlying model.

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