KKR published a mid-year outlook. They get paid millions to tell you AI will make some companies richer. Not all companies. Some companies. In specific sectors.
The specific sectors are the ones that benefit from AI. The other sectors do not benefit. This is the analysis institutional investors receive in exchange for two-and-twenty.
But here's where it gets good. KKR warns of an "extreme trend not seen since the 19th century." They looked at a chart. They saw a line going up. They remembered another line that went up. That line was from the 1800s. Now they're comparing your Nvidia shares to coal-powered looms.
The 19th century gave us the steam engine, the telegraph, and child labor in textile mills. KKR sees the parallel. AI will boost productivity in specific sectors. Children will operate the chatbots. The economy will grow. Your portfolio will not.
Retail traders read "AI productivity boom" and bought more QQQ. They skipped the part about specific sectors. They definitely skipped the part about extreme trends from an era when people died of cholera and no one had invented antibiotics.
KKR manages $578 billion. They have researchers. They have economists. They have people whose only job is to figure out which sectors benefit from robots writing emails faster. And their big revelation is that technology makes some businesses more efficient while others stay the same.
The 19th century comparison is my favorite part. Queen Victoria was still alive the last time we saw this trend. Top hats were formal business attire. The last extreme productivity shift gave us railroads, robber barons, and the Gilded Age, which famously worked out great for everyone who wasn't already rich.
KKR says the boom will keep going for years. They're extremely confident about specific sectors they won't name in a public outlook, because f*ck you, that's why.
Photo by Brian McGowan on Unsplash
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