AI vs Wall Street - My Money is on AI

AI vs Wall Street – My Money is on AI

William Griffo

BY BILL GRIFFO

August 20, 2025

Hey Income Hunters,

For over 150 years, Wall Street has been built on people — armies of analysts, junior bankers, and sales teams working late nights to move money and make money.

I worked on Wall Street from 1980 – 2010 and the growth was incredible … Near the end you had to wait for a couple of subways to go by before squeezing into the 2 train to go from Penn Station to Wall Street.

The rise of AI is changing that faster than most realize.

Goldman Sachs CEO David Solomon recently admitted that what once took six bankers two weeks — drafting an IPO prospectus — can now be 95% completed by AI in minutes. That is not just efficiency it is a revolution and its not just speculation anymore its happening.

This is really important for long-term investors to understand. Click through to see why …

The Coming White-Collar Shakeout

For decades, Wall Street jobs were thought to be insulated from automation. After all, who could replace a finely-tuned Harvard MBA with an algorithm?

Turns out: AI powered models can.

These areas are most replaceable thanks to AI:

Research analysts – AI can synthesize filings, earnings calls, and sector reports in seconds.
Sales & trading desks – Algorithms already dominate execution, and AI is now writing the pitches.
Compliance and risk teams – AI can flag suspicious trades and anomalies across millions of transactions in real time.

Entire Wall Street teams may disappear even before AI starts biting into legal, accounting, and even medical roles.

Leading Job Data is Flashing Red:

Private job growth diffusion indexes slipped into contraction this spring — levels that often precede recession.
As Power Income said on 8/18 Here , we know the Fed is going to cut rates but will rate cuts save jobs being replaced by software?

A leading indicator of the job market is the diffusion index, which measures the difference between jog gains and job losses. A measure below 50 means the economy is losing jobs.

History Offers a Warning

When China entered the WTO in 2001, US manufacturing workers saw wages and living standards collapse.

When e-commerce took hold, lower class malls were left to rot. This time, the target isn’t factory workers or mall clerks — it’s white-collar professionals with six-figure paychecks and six-figure student loans.

This chart below compares two trends from 2020–2025:

Blue line (left axis): AI CapEx (capital expenditures) – Billions spent by companies on AI infrastructure, chips, and software.

Green line (right axis): Net US job growth (millions) – Annual job creation measured across the US economy.

The chart above shows that the more capital companies plow into AI, the fewer jobs are created in the broader economy — because AI replaces human labor faster than new industries absorb displaced workers.

Market Implications

Here’s where investors need to pay attention:

Consumer credit stress
Highly paid professionals losing jobs means delinquencies in mortgages, car loans, and even student loans. That bleeds into serious problems at Bank’s whose business is built on making those loans .
Bond market stress
If banks are forced to sell Treasuries to offset loan losses, yields/interest rates rise — even in a recession. The alternative? Another round of money printing to bail out the system.
Political risk
Displaced professionals don’t go quietly. History shows that when upper class workers face “overproduction” — too many money makers competing for too few top jobs — political instability rises. AI could accelerate this.

Winners and Losers

AI, like the internet before it, levels the playing field. A smart, hungry entrepreneur in Bangalore or Buenos Aires can now build global products without Wall Street backing.

That means expensive cities i.e. New York, San Francisco, London — may lose out. Meanwhile, AI-enabled startups could disrupt incumbents the way Amazon gutted malls.

Just think back to 1999 when the internet was said to disrupt the way business is done.

AI is giving us that same exhilarating — and terrifying — feeling.

Portfolio Strategy: Don’t Bet on AI Makers — Bet on Survivors

Every boom tempts investors to chase the “obvious winners” — the AI chipmakers, cloud giants, or software darlings. But history says the survivors are hard to pick.

This time around investors may want to focus on assets that:

Do not depend on which AI company wins.
Hold value through disruption of labor markets and debt markets.

As Power Income has been saying for over a year now the choice is gold and bitcoin.

Why?

They aren’t tied to any single corporation’s financial health (balance sheet).
They hold up in deflation (when banks fail) and inflation (when central banks print).
They are outside the fragile debt market that underpins the current system — a system AI is making less sustainable and the world is preparing for a new monetary system.

Gold and bitcoin don’t care who writes your IPO prospectus.

The Bottom Line

AI isn’t just going to replace a few junior bankers. It’s going to reshape markets, politics, and the financial system itself.

For investors, the lesson is clear:

Expect volatility
Expect political shockwaves.
Anchor your portfolio with hard assets — not just AI stocks.

Because when the dust settles, the question won’t be which bank has the biggest analyst class. It’ll be: who actually protected their wealth when the rules of money were re-written.

Live and Trade With Passion My Friends,

Bill Griffo