"The DeepMind cofounder and CEO said in an episode of "Google DeepMind: The Podcast" published Tuesday that there are likely "bubbles" forming in today's AI funding frenzy, particularly among early-stage startups raising money at huge valuations. Some startups "basically haven't even got going yet," he said, yet are raising at "tens of billions of dollars valuations just out of the gate.""
"Hassabis drew a distinction between those sky-high seed rounds and the large tech companies pouring billions into AI infrastructure. There's "a lot of real business" underpinning Big Tech's valuations, he said. AI is "overhyped in the short term" but "still underappreciated in the medium to long-term," he added. Hassabis said an "over-correction" is imminent for any major technology shift like AI, especially when it goes from skepticism to obsession quickly."
Some early-stage AI startups are securing extremely high valuations despite minimal operational progress, creating concerns about sustainability and potential bubbles in AI funding. Sky-high seed rounds contrast with large technology companies pouring billions into AI infrastructure that is underpinned by substantive business activity. AI appears overhyped in the short term while remaining underappreciated over the medium to long term. Rapid swings from skepticism to obsession commonly trigger over-corrections during major technology shifts. Historical trajectories show companies once doubted can become central to business discourse over a decade. DeepMind develops AI models powering Google's products, including Gemini, and leads frontier AI efforts.
Read at Business Insider
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