Artificial intelligence (AI) has taken the world by storm, with investors eagerly seeking ways to capitalize on this trend. Richard Bernstein Advisors CEO Rich Bernstein joins to discuss why he's cautious about AI investing.

Bernstein acknowledges that AI will transform the economy, much like other major technological innovations such as the internet, automobile, and light bulb. "This is not the first time we're seeing technological innovation," he tells Yahoo Finance. However, from an investment perspective, he notes that long-term returns are based on the supply and demand of capital. In the AI space, companies are not "starved for capital."

"Look, AI might work in the next week, the next two weeks, the next month — I don't know that. But I can tell you that longer-term, we think this is going to be a very disappointing story," he states.

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This post was written by Angel Smith