Nobel Economist Warns AI Stock Boom May Be ‘Rational Bubble’

(MENAFN) The sharp rise in artificial intelligence (AI) shares could represent a “rational bubble,” Nobel Prize-winning economist Peter Howitt told a news agency, noting that some companies may ultimately succeed just as “Amazon came out of the dotcom bubble.”

Speaking during the 56th annual World Economic Forum (WEF) in Davos, Switzerland, Howitt emphasized that Europe must find ways to concentrate more on pioneering innovation, as the region still lacks large-scale and transformative breakthroughs despite certain achievements.

“I think that requires perhaps a more flexible financial system than they currently have,” explained the Brown University professor.

He added, “One of the wonders of the US economy is their venture capital system is unrivaled in the world, (and) I think that Europe has the potential to do that, but it's going to require cooperation -- that’s always difficult in Europe.”

Howitt further highlighted that several American firms have chosen to expand into Europe, presenting a significant chance to strengthen innovation across the continent.

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