Billionaire Jeff Bezos says the current wave of artificial intelligence investment has all the hallmarks of an industrial bubble, with billions chasing companies that have yet to build a product.
Speaking at Italian Tech Week in Turin, the Amazon founder raises bubble concerns as he sees companies getting funded to the tune of billions of dollars based on concept alone.
“Now, what the stock market does, which is when we think of bubbles, we think of valuations and market caps and things like this, and how many billions of dollars are being invested in these six people at a $20 billion valuation, even though they just started yesterday. That’s very unusual behavior. Investors don’t usually give a team of six people a couple of billion dollars with no product. It’s rare. And that’s happening today.”
He also says that the AI boom is in the midst of an industrial bubble, which he notes is different from the ones witnessed in the 1990s and in 2008.
“But the great thing about industrial bubbles — this is a kind of industrial bubble, as opposed to financial bubbles — and I’ll tell you what I mean by that. If you go back, like the 90s had a biotech bubble. And there were a bunch of pharma startup companies that were designing drugs and using new techniques. And the world got very excited, the investment world got very excited. As a group, they all lost money, but we did get a couple of life-saving drugs.
A bubble, like a banking bubble, a crisis in the banking system, that’s just bad. That’s like 2008. And so, those bubbles, society wants to avoid.”
Despite the warnings, he underscores the reality of the technology’s impact.
“The ones that are industrial are not nearly as bad. It could even be good, because when the dust settles and you see who are the winners, society benefits from those inventions. They still get those life-saving drugs. And that’s what’s going to happen here, too.
This is real. The benefits to society from AI are going to be gigantic.”
Disclaimer: Opinions expressed at CapitalAI Daily are not investment advice. Investors should do their own due diligence before making any decisions involving securities, cryptocurrencies, or digital assets. Your transfers and trades are at your own risk, and any losses you may incur are your responsibility. CapitalAI Daily does not recommend the buying or selling of any assets, nor is CapitalAI Daily an investment advisor. See our Editorial Standards and Terms of Use.