A veteran Silicon Valley investor says the artificial intelligence boom is following a familiar historical pattern, and that retail investors are now stepping into its most dangerous phase.
In a recent interview with Tim Ferriss, Bill Gurley says today’s AI frenzy can be viewed through the lens of past technological revolutions that reshaped the economy and markets.
Gurley points to the work of economist Carlotta Perez, whose research examines how major technology waves tend to unfold alongside financial speculation.
“What Perez kind of simplifies and notices, which I just find perfect for trying to understand whether there’s a bubble or not, is that every time there’s been a technology wave that leads to wealth creation, especially fast wealth creation, that will inherently invite speculators, carpetbaggers, interlopers that want to come take advantage of it.”
He stresses that speculation does not invalidate the underlying technology. In fact, he says the two usually appear together.
“If the wave is real, then you’re going to have bubble-like behavior. They come together as a pair precisely because anytime there’s very quick wealth creation, you’re going to get a lot of people that want to come try and take advantage of that or participate in it.”
Gurley says artificial intelligence fits that historical template, with transformative technology and aggressive speculation rising at the same time.
“There’s a real technology wave that’s fundamentally changing the world. And there’s also massive speculation simultaneously.”
Where his concern sharpens is around who is entering the market now, and how.
“When it comes to retail investors, I would be particularly concerned for them at this stage in the AI game, because there is a plethora of SPV vehicles.”
He describes special-purpose vehicles as increasingly risky, especially when marketed to less sophisticated investors.
“This is where someone has an in on an investment, and they do a one-off VC fund, if you will. And there’s people promoting SPVs in situations where they don’t even actually have the underlying stock, or maybe they hope to get it. It’s the Wild, Wild West. Most of the people on that edge, I would put in the category of interloper, carpetbagger.”
He contrasts today’s environment with the early days of the AI boom, when the biggest gains were captured.
“The investments that were made that have already had 100X plus returns were made a while ago, before this thing started.”
While Gurley does not rule out future winners, he cautions that the odds have shifted sharply.
“That’s not to say there won’t be an incremental AI investment that makes money. I think there will. But your odds right now of that being the case are really, really low.”
His warning frames the current moment as one where the technology may still be advancing rapidly, but the financial risk for late-arriving retail investors has risen just as fast.
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