Artificial Intelligence (AI) has entered the forefront of economic and stock market developments for good after its new applications, such as ChatGPTwhich 1 million users quickly took advantage of.

The caveats that accompany the new technological revolution are many, with the creator of ChatGPT himself warning that a strong regulatory framework is needed by governments to avoid abuses in its implementation. The great American investor, Warren Buffetthe even likened AI to the nuclear bomb to show the dangers it poses.

Meanwhile, however, the use of artificial intelligence is steadily expanding, and it is typical that the world’s largest banks are quick to announce that they are investing in its applications for various of their individual activities. JPMorgan, the largest US bank by assets, has announced thousands of big data hires since the start of the year, signaling that its business will center around the new technology.

Artificial intelligence is clearly affecting and will affect the global economy more broadly, as has happened in the past with similar major technological developments. Businesses that will adopt the new applications may gain a significant competitive advantage, but at the expense of employment which is expected to be negatively affected as many jobs will be replaced by programs such as ChatGPT.

Some industries will grow more, such as those who make the microchips that are essential to the operation of AI applications, while others will retreat. In other words, AI will reorder the economic landscape more broadly.

These trends have been discounted, as it happens in these cases, by the stock markets, sending shares of companies related to artificial intelligence soaring. For Wall Street, AI is the new narrative underpinning its rally at a time when there are obvious risks from a slowing U.S. economy, rising interest rates and high stock valuations.

The buying frenzy for AI companies has eclipsed the decline of the majority of companies in the S&P 500 index, which has recorded gains of 9% since the beginning of 2023. At the forefront of the beneficiary companies is Nvidia, a company that makes microchips for artificial intelligence applications. Its stock took off this year, registering a rise of 170% which in terms of capitalization corresponds to 575 billion. dollars, profits that historically had been exceeded in a corresponding period of time only by Apple and Microsoft. Thus, the capitalization of Nvidia exceeded, even temporarily, last week, 1 trillion. dollars and joined the club of the five largest companies in the world.

Other semiconductor companies have also made big gains, including Taiwan Semiconductor Manufacturing, whose stock is up 39% year-to-date, and world semiconductor leader Micron Technology, whose stock is up 47% this year .

Advanced Micro Devices, which makes software for AI tasks, has seen its stock jump 94% this year. Big tech companies are also winners, such as Microsoft, which is the main shareholder of Open AI, the company that discovered ChatGPT. Its stock has soared 40% this year, making up for last year’s losses. Shares in Meta, as Facebook has been renamed, are up 116% this year, and Google parent Alphabet is up 40%.

On the other hand, Rajiv Jain, founder and chief investment officer of major investment firm GQG Partners, said that AI’s onslaught will create more losers than winners as it rearranges business models across all sectors of the economy. Jain said some software and technology services companies may find themselves on the losing side as AI automates some of their products, which will no longer be in demand.