Part 5/9:

3. Demand Weakness

While AI tools have seen widespread adoption, less than 20% of firms using AI report measurable improvements to their bottom line. If this trend continues, demand could cool, leading to a slowdown in AI's growth trajectory and a possible market correction.

4. Dependence on Physical Inputs

Despite being digital, AI technology relies on physical resources—energy, rare materials, and hardware. Policy shifts or geopolitical tensions, such as China’s rare earth export controls or tariffs introduced by nations, could disrupt supply chains overnight, affecting the entire AI infrastructure and investments tied to it.

Strategies for Protecting Your Investments

Given these risks, investors should adopt a prudent, disciplined approach: