The AI Paradox: Why Jim Bianco Says Automation Could Spark Inflation, Not Kill It

Everyone’s heard it before: AI is coming for your job, and your wallet. It’s supposed to be the great deflationary force, vaporizing millions of roles and dragging prices down with them.

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But macro strategist Jim Bianco has a different view. Drawing inspiration from Northwestern professor Robert Gordon, Bianco believes AI will ultimately create more jobs than it destroys - and not just any jobs, but ones that fuel new, inflationary industries.

“AI is going to be a net creator of jobs… It will open up whole new industries and millions of jobs that don't exist right now.”

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🚗 Self-Driving Cars: A Case Study in Misplaced Assumptions

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Take the oft-cited example of driverless cars. Most assume that automating 8 million driving jobs across the U.S. would be a massive deflationary shock.

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Not so fast, says Bianco.

“If we eliminate drivers, we've changed the way we live our lives. You won’t need a garage. You won’t need a car. You’ll just push a button and a driverless taxi shows up.”

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That single change in infrastructure could spark an explosion of on-demand delivery businesses, mobility services, and AI-optimized logistics, sectors that don’t exist yet but will require talent, capital, and new infrastructure.

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Sound familiar?‍

“When Steve Jobs introduced the iPhone, nobody said that was the end of the taxi or hotel industries. But it was.”

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Just like the iPhone gave rise to Uber and Airbnb, Bianco believes AI will generate unpredictable knock-on effects that reshape how we live, and spend.

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🔁 A Look Back: The Spreadsheet Effect

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AI’s deflationary argument also forgets something critical: we’ve seen this movie before.

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In the 1980s, the invention of VisiCalc, Lotus 1-2-3, and eventually Excel seemed like a death knell for accounting clerks. And it was, at first.

“Over the next 10 years, 70% of accounting clerk jobs disappeared. But we created even more financial analyst jobs. And they earned far more.”

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AI could follow the same trajectory. It may eliminate repetitive roles, but in doing so, unlock high-value professions we haven’t imagined yet.

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This doesn’t reduce prices. It reshuffles value and potentially amplifies inflation as demand surges for talent and services that didn’t exist before.

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🧨 The Next Phase: Decentralization Will Be the Catalyst

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Right now, Bianco says, AI innovation is bottlenecked by mega-cap control. But that’s going to change - and fast.

“When AI becomes decentralized—when anyone can create their own large language model for free—that’s when the real creative capacity takes off.”

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Just as the internet exploded in the early 2000s once barriers to entry collapsed, Bianco believes AI’s true economic impact will begin when it’s in everyone’s hands, not just the hands of trillion-dollar firms.

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That’s when value moves away from the Magnificent 7 and toward the “three guys in a garage” startups. That’s when venture capital, retail investors, and innovators converge, and when the investment opportunity shifts dramatically.

“Right now, the MAG7 are the picks and shovels play… but when AI decentralizes, that's when the real action begins—just like with Amazon and Google after the dot-com crash.”

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💼 What It Means for Investors

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Bianco doesn’t give financial advice, but his framework forces investors to think beyond the obvious.

• Deflation isn’t guaranteed
• Big Tech won’t own the future forever.
• And AI could inflate demand in ways Wall Street isn’t pricing yet.

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If you’re an investor who only sees job losses and falling prices, you may be missing the most explosive part of the story.

“The real risk isn’t that AI destroys too much—it’s that it creates more than we can handle. That’s when inflation returns in a very different form.”

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🔚 Final Thought: Don’t Just Watch AI—Watch Who Controls It

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The coming AI era probably won't look like what we imagine. It may look more like the Gold Rush: a frenzy of innovation, decentralization, and asymmetrical opportunity.

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And just like in every real innovation wave, the biggest rewards may not go to those who predicted it first, but to those who built the tools once it was finally open to all.

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