AI bubbles and England’s railway boom? Francis Kim draws comparisons

Associate Professor of Finance Francis Kim is a regular contributor to Korea JoongAng Daily. In his latest column, he compares the AI bubble to England’s railway industry in the early to mid-1800s and suggests Britain’s railway boom offers important lessons for Korea’s capital markets.

“Over the past year, explosive investment in AI data centers and related infrastructure has driven semiconductor stocks sharply higher,” Kim writes. “Even previously uninterested investors have borrowed heavily to join the rush. The government’s recently announced three mega-projects could see semiconductor complexes and AI facilities requiring investments exceeding half of GDP. Without careful scrutiny, excessive spending could inflate unrealistic expectations and encourage speculation. Railways transformed the world, but not everyone who bought railway stocks became rich. The AI revolution is unlikely to be any different.”