David A. Kirsch

The four factors that we looked at were the presence of uncertainty, so uncertainty

Is it a technology that people know how to use or is it a technology that people don't know how to use or how it will generate value?

Does it happen in the presence of novice investors?

These are investors who might be inexperienced or might not have seen technologies similar to the new technology in the past.

Does the technology arrive in a way that investors can invest in it?

So is it something where we can go to our Schwab account and buy something that reflects the technology?

Finally, what are the nature of the narratives surrounding the technology?

Is it a technology that has a magic to it that says, oh, we can do this, we can do that?

There are lots of narratives, or is it a pretty straightforward technology?

So when we look at those four factors and we say, well, that can be the recipe for a boom if all four of those factors are there.

And if there's a boom, then there can be a bust.

We don't actually have a theory of the bust because it's very hard to know when you have a boom, will the technology kind of catch up and in fact deliver on its promise?

Or will there be an over-commitment, over-investment

overenthusiasm, and even a very impressive technology may still not be able to deliver in the timeframe that investors require.

Yes, they are, for the reason that new technology

destroys expertise.

It naturally generates a type of uncertainty.

Lots of people call and ask, well, is there an AI bubble, this and that?

And I said, the first thing, if anyone tells you they know the answer, they're wrong because nobody has seen what AI does to the highly developed capitalist economy.

This is happening for the first time.