Aswath Damodaran, a finance professor at New York University Stern, cautioned that investors focusing on current AI infrastructure leaders like Nvidia may be overlooking the true long-term beneficiaries of the ongoing technology boom. In an interview with CNBC-TV18, he argued that while chipmakers and data center providers are clear winners of the current capital expenditure cycle, historical patterns suggest they may not remain the dominant long-term players. He compared the current AI market to the internet boom, noting that just as companies like Cisco were once considered the primary leaders while Amazon eventually captured the greatest long-term value, the most significant AI success stories may be companies that are currently unknown or not yet public.

Damodaran highlighted that the global market has already invested trillions of dollars into building the 'AI factory'—infrastructure such as chips and data centers—without certainty regarding which businesses will ultimately generate the profits to justify such massive costs. He noted that the AI trade has recently shown signs of volatility, yet the broader markets have remained resilient, suggesting that the degree to which AI spending currently carries equity markets may be overstated.

Beyond financial implications, Damodaran raised significant concerns regarding the societal impact of the most bullish AI growth projections. He estimated that for the AI market to reach valuations as high as $26 trillion, as suggested in some projections, approximately 50% of white-collar workers, including lawyers, consultants, and journalists, would need to be replaced. He warned that such widespread unemployment would destabilize consumer spending and undermine the very demand required for AI products to succeed. Ultimately, he does not expect AI to either eliminate half of all jobs or prove to be a fleeting fad, but rather anticipates a middle ground where the technology enhances productivity while displacing specific professional roles.

Aswath Damodaran, a finance professor at New York University Stern, cautioned that investors focusing on current AI infrastructure leaders like Nvidia may be overlooking the true long-term beneficiaries of the ongoing technology boom. In an interview with CNBC-TV18, he argued that while chipmakers and data center providers are clear winners of the current capital expenditure cycle, historical patterns suggest they may not remain the dominant long-term players. He compared the current AI market to the internet boom, noting that just as companies like Cisco were once considered the primary leaders while Amazon eventually captured the greatest long-term value, the most significant AI success stories may be companies that are currently unknown or not yet public.

Damodaran highlighted that the global market has already invested trillions of dollars into building the 'AI factory'—infrastructure such as chips and data centers—without certainty regarding which businesses will ultimately generate the profits to justify such massive costs. He noted that the AI trade has recently shown signs of volatility, yet the broader markets have remained resilient, suggesting that the degree to which AI spending currently carries equity markets may be overstated.

Beyond financial implications, Damodaran raised significant concerns regarding the societal impact of the most bullish AI growth projections. He estimated that for the AI market to reach valuations as high as $26 trillion, as suggested in some projections, approximately 50% of white-collar workers, including lawyers, consultants, and journalists, would need to be replaced. He warned that such widespread unemployment would destabilize consumer spending and undermine the very demand required for AI products to succeed. Ultimately, he does not expect AI to either eliminate half of all jobs or prove to be a fleeting fad, but rather anticipates a middle ground where the technology enhances productivity while displacing specific professional roles.