[TURIN] Amazon.com chairman Jeff Bezos said that the spending on artificial intelligence resembles an “industrial bubble” that could lead to lost investment but will also make society better off.
“When people get very excited, as they are today about artificial intelligence for example, is every experiment gets funded, every company gets funded, the good ideas and the bad ideas,” Bezos said, pointing to companies getting billions of US dollars of funding before they have a product. “Investors have a hard time in the middle of this excitement distinguishing between the good ideas and the bad ideas.”
Still, AI is going to change every industry and improve productivity of “every company in the world,” he said at Italian Tech Week in Turin on Friday (Oct 3).
What’s happening currently is an “industrial bubble” akin to the biotech bubble in the 1990s where companies went out of business and investors lost money, but “we did get a couple of lifesaving drugs.” Bezos also pointed to the dot-com bubble a quarter century ago as a frothy investment period that’s benefiting the world today.
Companies building AI as well as the technology around it, from data centres and chips to applications, are receiving enormous amounts of funding. So-called neocloud providers, that provide big technology companies with extra computing power and access to specialised chips for running AI, are being funded even before they’ve built the infrastructure.
The excitement around AI and its potential has led to huge valuations for these businesses. A BlackRock business is in talks to buy Aligned Data Centers in a deal that could be valued at about US$40 billion, Bloomberg News reported on Friday. ChatGPT maker OpenAI became the most valuable privately held company with a US$500 billion valuation in a recent secondary share sale.
Some investors have sounded the alarm on the amount of money pouring into companies in the AI ecosystem. GIC’s chief investment officer Bryan Yeo said this week that a “hype bubble” is building, particularly in early-stage AI venture investing.
Bezos recommended taking the long view. “When the dust settles and you see who are the winners, society benefits from those inventions,” he said. “That’s what’s going to happen here too. This is real. The benefits to society from AI are going to be gigantic.” BLOOMBERG
