AI: Boom, bubble, or both

Jobs: transformation, not mass displacement

While AI will change the nature of work, CBA economists see little evidence to support fears of widespread technological unemployment.

Most roles are expected to be augmented rather than replaced, particularly in professional services, administration and customer-facing industries. Over time, new jobs are also likely to be created as AI enables new products, services and business models.

Looking further ahead, advances in robotics combined with AI could have a more disruptive effect on labour markets in the 2030s, especially in physical and manual tasks. But for now, the impact is expected to be gradual.

The bottom line

CBA's research indicates fears of an AI bubble aren't irrational, but that they may be overstated. While valuations are elevated and risks remain, today's AI boom is underpinned by real investment, strong profitability and genuine economic benefits.

AI is unlikely to deliver a smooth ride for markets. Rather than a dramatic bust, the more probable path is ongoing growth punctuated by periodic corrections, with AI emerging as a defining force shaping global growth in the years ahead.

"In this new, more challenging, economic era, AI stands out as the potential saviour. 2025 marked the transition from AI expectation to AI impact, helping the global economy shrug off the tariff hit. We expect this to continue in 2026," Yeaman said.

Read the full paper from Luke Yeaman, Samara Hammoud and Lucinda Jerogin: AI: Boom, Bubble or both?