People are catastrophizing AI's impact on markets. Here's why the 'U.S. economy is about to take off' case is actually stronger than the doom narrative

Every week there's a new headline about how AI is going to eat jobs, destroy entire sectors, and crash the stock market. Anthropic's Claude caused a rattle in the stocks earlier this month. DeepSeek before that. The market seems to panic every time there's a new AI model. But here’s the question that I keep returning to: when has a major productivity revolution crashed the stock market in the long term? Let’s look at history. The Industrial Revolution (1760-1840) destroyed jobs in the field of hand weaving on the basis of textile technology. It created new jobs in the textile and steam industries, the railroads, and consumer goods. This was the largest creation of wealth in human history. Electrification (1880-1920) destroyed the gas lamp, ice, and horse transport industries. It created new jobs in the electrical utility, appliance, and manufacturing industries. This would have made the S&P500 index owners rich. Computing and the internet (1990-2000) destroyed travel and travel agency jobs, publishers of encyclopedias, record stores, and classified ads. This created companies worth a trillion dollars, including Google, Amazon, Microsoft, and Apple. Despite the dot-com bubble, this was a massive creation of wealth. So the pattern is clear: New technology destroys specific jobs and industries Stock markets panic New industries and jobs are created There is a net increase in the number of people employed and the wealth of the population AI is about to follow the same pattern. The analyst cited in Fortune magazine says that the U.S. economy is about to take off for the following reasons: Productivity will go up, and with that comes a surge in corporate profits New industries are forming that will employ tens of thousands of people The fact that companies such as Anthropic and Claude are "rattling" the stocks indicates that the artificial intelligence is providing value to companies. This will lead to increased revenue from those firms. The legitimate bear case is that in this transition phase, many people will become unemployed, and the country will experience political instability. Some of the greatest corporations will be disrupted by the rise of AI. The rise of AI in a few companies will also cause market volatility. But the idea that AI will crash the stock market (as a sustained trend) is directly contradicted by history. The companies and industries that get hurt will be specific. The overall stock market, however, has absorbed every historical productivity revolution and emerged higher. What do the bears actually believe? Are they predicting a temporary market correction or a sustained market decline? Not financial advice. submitted by /u/arrremayu [link] [comments]