Vinod Khosla doesn't care about what Wall Street thinks of AI.

""People equate bubble to stock prices, which has nothing to do with anything other than fear and greed among investors," he said. "So I always look at, bubbles should be measured by the number of API calls." API, or Application Programming Interface calls, refer to the process in which one software application sends a message to another application to request data or to trigger an action. They are a common indicator of digital tools' use, especially with the rise of AI agents."

"Khosla said the bubble shouldn't be called "by what happened to stock prices because somebody got overexcited or underexcited and in one day they can go from loving Nvidia to hating Nvidia because it's overvalued.'" The 70-year-old VC, whose notable investments include OpenAI, DoorDash, and Block, compared the AI bubble to the dot-com bubble. He said he looked out for internet traffic as a metric during the 1990s, and with AI bubble concerns, that benchmark is now API calls."

Vinod Khosla gauges AI industry health by measuring API call volumes rather than stock prices or Wall Street sentiment. API calls denote interactions where one application requests data or triggers actions, and their volume indicates real usage, demand, and sometimes inefficiency. Khosla compares this approach to tracking internet traffic during the 1990s dot-com era. High API call volumes signal practical adoption and usefulness of AI, while stock-price swings reflect investor fear and greed and are less informative. Broader debate over an AI bubble continues alongside large investments, and Nvidia's Jensen Huang frames AI as driving a major shift in computing.

Read at Business Insider