Macro Investor Raoul Pal: AI is the Greatest Deflationary Force in History, Productivity is the Real Money Printer
Macro investor and Real Vision founder Raoul Pal stated that artificial intelligence is the largest deflationary force in human history. If it develops as he expects, people will feel genuinely wealthier for the first time in decades.
Pal pointed out that subsidies, tax cuts, and money printing cannot truly improve living standards; the only thing that can change this situation is a productivity boom that can convert currency devaluation into abundance. He emphasized that the process will not be smooth, accompanied by political struggles, slowdowns in some industries, surges in others, and pressure on industries on the wrong side of the cycle.
He views this as the core of the "exponential age," focusing not on whether AI surpasses humans, but on the vertical rise of the productivity curve, allowing the entire economy to breathe. Pal has previously articulated that AI, robotics, energy, and crypto are all entering steep phases simultaneously and reinforcing each other.
This viewpoint continues his discussion on economic singularity and debt traps, believing that AI and robotics will become the new labor force, driving GDP growth to exceed debt growth, and for the first time reversing the trend of rising debt as a percentage of GDP.
From a market mechanism perspective, the viewpoint drives funds to focus on productivity-related assets, expecting that deflation and actual income increases will benefit technology and efficiency sectors while putting pressure on traditional high-inflation beneficiary industries. Funds will flow to companies capable of implementing AI and automation, benefiting those in computing power and application layers, while industries reliant on labor-intensive or inefficient models will face pressure.
Source: Public Information
ABAB AI Insight
Raoul Pal has long focused on the intersection of macro and technology, previously articulating the "exponential age" through Global Macro Investor and Real Vision, believing that the simultaneous acceleration of AI, robotics, solar energy, and blockchain curves will create unprecedented productivity leaps. His career has experienced multiple cycles and emphasizes constraints from debt and demographic structures.
In terms of capital pathways, Pal aims to concentrate research resources on the long-term impact of productivity breakthroughs on currency and asset prices, motivated by identifying opportunities for real wealth growth in a deflationary environment, strategically guiding investors from a purely monetary easing narrative to a technology-driven abundance logic.
Similar cases can be seen in historical productivity waves brought by electricity and the internet, as well as the post-World War II productivity boom in the United States in the 1950s that halved the debt-to-GDP ratio, with the current phase being the early stage of multiple technology curves overlapping and entering steep segments.
Structural judgment belongs to technological substitution: AI pushes intelligent costs close to zero, with the mechanism being a significant increase in marginal output while lowering the prices of goods and services, allowing actual purchasing power to rise even amid nominal currency devaluation, thereby reconstructing the traditional trade-off between growth and inflation.
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