Tom Lee Says AI Killed Software And Job Losses Are 'Soon To Follow'

Core Viewpoint - AI is significantly disrupting the $450 billion software sector, leading to potential job losses and deflationary pressures in the economy [1][2] Industry Impact - Software companies, once dominant, are now facing existential threats due to AI displacement, which could shrink the software market and contribute to deflation [2] - The inflation outlook indicates that AI is contributing to disinflation, with core CPI projected to drop to 2.52%, aligning with pre-COVID inflation levels [3] Federal Reserve Outlook - The nomination of Kevin Warsh to the Fed is expected to lead to a dovish stance, with potential rate cuts as the economy adjusts to job losses and AI disruptions [4] - Historical Fed funds rates during 2017-2019 were between 1.5%-2.0%, suggesting significant room for rate cuts from current levels [4] Market Dynamics - A major market shift is occurring as investors rotate from the "Magnificent 7" tech giants to companies that provide AI infrastructure, such as energy providers and chip makers [5][6] - This rotation is anticipated to trigger a 10-20% decline in the U.S. market as capital flows out of the tech sector and into industrials and financials [7]