Gist: Is the "AI bubble" about to burst?
There's growing chatter about an "AI bubble" among investors and journalists. The former point to lackluster revenue growth among established players. The latter point to corporate decision-makers expressing buyer's remorse. Are they right? If so, what happens now?
The AI bubble, explained:
According to Jeremy Grantham, who co-founded Boston-based investment firm GMO in 1977 and is known for calling bubbles, "the best guess is still that this second investment bubble — in AI — will at least temporarily deflate" (Marketwatch)
Before dismissing the notion, consider:
- Amazon, Google Quietly Tamp Down Generative AI Expectations (The Information): "In the past year, major technology firms have championed generative artificial intelligence as the next big thing, boosting the stock market to new highs. But behind the scenes, representatives of major cloud providers and other firms that sell the technology are tempering expectations with their salespeople, saying the hype about the technology has gotten ahead of what it can actually do for customers at a reasonable price."
- Microsoft's pricey AI assistant Copilot gives some buyer's remorse (Business Insider): "But others aren't sure Copilot is worth the $30-per-person price tag (on top of a Microsoft 365 subscription), the Journal reported. Copilot's Excel and PowerPoint integrations weren't always reliable or accurate, critics told the WSJ. Others said the AI hallucinated wrong answers or calculated spreadsheets wrong, according to the outlet."
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