The existential fear of artificial intelligence has rocked the stock market. But if one thing can be learned from history it's that predictions about technology rarely turn out to be completely correct.
Will AI create a utopia where all diseases can be cured and no one will have to work if they don't desire to? Or will AI bring about a doomsday scenario in which agents go rogue and turn on humans, bringing about an extinction-level event?
The debate is playing out in real time and stocks have been caught in the middle with Tesla and SpaceX's Elon Musk, OpenAI CEO Sam Altman, and Anthropic CEO Dario Amodei calling for a slowdown in the pace at which AI is developing.
On the other side, President Donald Trump and Nvidia CEO Jensen Huang have pushed back against that narrative.
"Those predictions are inconsistent with ultimately America winning the AI race," Huang told Trump during a phone call Monday at the All-In Summit in Los Angeles, Calif.
What seems clear, however, is that the only sure thing that can be said about AI technology and what effect it will have on the economy is that we really don't know.
As former Secretary Donald Rumsfeld famously said "there are unknown unknowns." The endgame of AI lies seems to lie somewhere in that grey area even as politicians, the AI frontier lab executives, and investors make bold predictions about what the future will look like.
"A glance through history would give any investor indigestion. Most predictions are wrong," wrote Deutsche Bank Research analyst Adrian Cox.
The analyst added that questions around AI aren't only about "what it will be able to do but also when it will be able to do it."
What makes it tough for investors is that they're trying to game out whether the more than $5 trillion in investment by hyperscalers over the next five years will pay off before the advanced chips that are currently being purchased become redundant.
The existential dread around AI is nothing new for investors who have been grappling with push-and-pull predictions for nearly four years since OpenAI's ChatGPT stormed onto the scene.
This year investors have had to deal with the so-called SaaSpocalypse, with the potential for AI to disrupt software companies. Then there was the narrative that AI would destroy the job market and lead to skyrocketing unemployment.
The current cycle could be called the "AI extinction" narrative, and that's by far the most alarming.
A reason why the current debate has caught fire in a visceral way is the current political environment, according to Deutsche Bank.
"It comes amid a tech backlash, particularly in the U.S., where concern about AI has become a rare bipartisan issue ahead of the U.S. mid-term elections in November," Cox wrote.
The firm noted that there's a movement against data-center construction that has become a "rallying points for voters." Then there are the AI leaders defending their own businesses with the backdrop of upcoming potential initial public offerings and increased competition from open-source AI models.
"The current debate encapsulates a perfect storm of an extremely high-stakes issue with limited transparency and an inherently unknowable outcome," Cox wrote.
Microsoft, for one, has tried to stay ahead of the current narrative with the release of a new code of conduct for how it trains and operates its AI models. The company repeatedly noted its AI goal is for the human race to thrive.
CEO Satya Nadella posted to social-media platform X that AI must be focused on "helping humanity and under human control." If those aren't the principles, then "it's not worth pursuing," Nadella added.
But the thing about predictions is that they are just that, predictions and anyone is free to make them.
"For the time being, your predictions about the impact of AI are no less valid than an AI expert based in the very particular world of Silicon Valley," Cox wrote.
"The future of AI will be made not in Silicon Valley but in Main Street," the analyst added.