AI Investors Furious at Suggestion That There's an AI Bubble

"As dark clouds continue to gather over the stock market, and with fears of a ready-to-burst AI bubble growing, some investors are furious that anybody would even question the industry's enormous valuations, astronomical spending sprees, and severely lacking financial model. Many industry leaders have acknowledged that there's likely a bubble. But as Axios reports, die-hard AI investors are furious at the suggestion."

""The reality is, the world's not going to stop and AI is coming, so you have a choice, you could put your head in the sand or you can embrace it," RedBird Capital Partners managing partner Gerry Cardinale said at an Axios event this week. Others downplayed previous comparisons of the AI bubble to the dot-com implosion. "'The bubble' is a pejorative term," Sequoia Capital partner Roelof Botha said at this week's event. "You have so many industries that are relatively ossified and ripe for disruption," he said. "And AI isn't just a new distribution mechanism or a new interface. It is fundamentally a set of capabilities that can upend industries.""

"Not everybody shares that kind of boisterous optimism, at least when it comes to the immediate future. Even Google CEO Sundar Pichai himself made headlines this week after telling the BBC in an interview that "there are elements of irrationality" in the current AI boom. If a bubble were to burst, "I think no company is going to be immune, including us," he said. Hugging Face CEO Clem Delangue similarly said during this week's Axios event that "we're in a [large language model] bubble," renaming the current phenomenon, "and I think the LLM bubble might be bursting next year." However, Delanuge opined that LLMs are "just a subset of AI.""

Stock market concerns and fears of an AI bubble have provoked anger among some investors over criticism of AI valuations, spending, and weak financial models. Several prominent investors and executives express strong bullishness, arguing AI will disrupt many ossified industries and must be embraced. Other leaders acknowledge irrational exuberance and warn that a bubble could hurt many companies. Some executives predict a possible near-term LLM bubble burst while noting LLMs are only a subset of AI. Market reactions remain volatile, with rallies tied to major AI-related earnings events such as Nvidia's report.

Read at Futurism