A recent Wall Street Journal article highlighted a familiar pattern: companies announce layoffs and their stocks often move higher. The conclusion is straightforward—cut costs, improve margins, and investors reward discipline. That conclusion is increasingly wrong, especially for companies in the business of providing the infrastructure of artificial intelligence. Here’s the reason. In prior cycles, layoffs […]
In 1937, economist Ronald Coase asked a great question: why do firms exist? His answer—for which he won a Nobel Prize 54 years later—was that coordinating efforts is expensive. Markets require constant negotiation—finding suppliers, agreeing on terms, and enforcing contracts. Firms arise when it becomes cheaper to organize activity internally than to rely on the […]
I keep hearing that artificial intelligence (AI) is not delivering on promises of booming productivity. Economists look at national statistics and see only modest gains. Skeptics conclude that AI is overhyped—another technology long on promise and short on measurable gains. I heard the same thing back in the early 1990s when a plethora of distinguished […]
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