french media: is the artificial intelligence bubble about to burst?
2024-10-06
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reference news network reported on october 6according to a report by agence france-presse on october 4, concerns about missed opportunities have sent the value of artificial intelligence companies soaring, even though there is little sign of when the technology will be profitable. this has sparked debate about whether there is too much enthusiasm for artificial intelligence.
analysts who spoke to afp said the mystery deepens when it comes to predicting which generative ai companies will win.
the open artificial intelligence research center (openai), which develops the chat generation pre-trained transformer (chatgpt), received us$6.6 billion in the latest round of financing, pushing its valuation to an eye-popping us$157 billion. this raises new concerns that the ai bubble is about to burst.
"we're in a bubble where all the vendors are running around saying you have to do this as the latest digital transformation initiative," rob endler, an independent technology analyst at the endler group, said of generative ai. deploy."
"i expect to be in this bad phase for the next two to three years, but then things should work out," endler said.
critics say buyers don't really understand the technology and the market needed for it to thrive isn't mature yet.
endler also said investors are pouring money into generative ai companies under the mistaken belief that we are close to achieving the technology that will allow computers to think like humans, a technology known as general artificial intelligence.
endler said this "holy grail" won't appear until 2030 at the earliest.
industry giants amazon.com inc., google inc., metaverse platform inc. and microsoft corp. are all backing the technology. they have formed partnerships and launched products to accelerate the adoption of this technology.
but these tech giants are spending heavily to deliver sometimes flawed features that currently cost more than they earn from users.
grace harmon, an analyst at e-commerce market research, said of openai's latest round of funding that the huge investment in openai shows that big tech companies are willing to "invest a lot of money into a company that is dealing with significant operating losses."
“there’s always been a concern that you’re underinvesting in artificial intelligence and you’re going to be disadvantaged... even if there’s no guarantee of a return on the investment,” she said.
dan ives, an analyst at wedbush securities and one of the most convinced of the importance of generative artificial intelligence on wall street, likened the emergence of chatgpt to the "iphone moment" and said that artificial intelligence capital expenditures will reach 1 in the next three years. trillions of dollars.
after openai completed its historic financing, ives said: "the artificial intelligence revolution is not only around the corner, but it is actively shaping the future of the technology world."
wall street is firmly on ives' side and has pushed the share prices of the ai-chasing tech giants to record levels since chatgpt launched in late 2022.
amid this craze, artificial intelligence chip giant nvidia once became the world's most valuable company in june.
but according to media reports, openai’s sales this year will be us$3.7 billion and its losses will be us$5 billion.
the company told investors that the pain would be short-lived and revenue would grow exponentially, reaching a staggering $100 billion by 2029.
the question is whether people will pay for generative ai services, such as microsoft corp.'s copilot, which relies on openai technology, said carolina milanesi, an analyst at innovation strategies. milanesi rejects claims of an ai bubble.
"consumers will start to move beyond write-me-a-poem stuff," she said. "it (generative ai) will become a part of our lives and we will rely on it because we will be forced to do it."
but for now, analysts say, business models for generative ai are still struggling to work because the cost of data centers and computing power dwarfs revenue.
still, milanesi doesn’t think the tech industry is getting carried away with generative ai.
the end result, she said, "isn't very likely to be like a bubble bursting and everyone losing."
"it's kind of like a darwinian situation where survival of the fittest is happening," she said.
while generative ai itself generates more excitement than actual evidence of its success, the technology is advancing at an unusually fast pace.
"investors are not sure where the destination is, but everyone is jumping on board and doesn't want to be left behind," endler said.
he said: "that usually doesn't end well." (compiler/feng xue)
