"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 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. 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 centers 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 specialized 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."
Spending on artificial intelligence resembles an industrial bubble in which experiments and companies receive funding before products exist, making investor differentiation between good and bad ideas difficult. Large flows of capital target AI platforms and supporting technology including data centers, specialized chips, neocloud providers, and applications. Historical parallels include the biotech bubble of the 1990s and the dot-com bubble, which produced business failures and investor losses but also yielded lifesaving drugs and enduring technological benefits. Sky-high private valuations and major potential transactions illustrate the frothy market, while some investors warn that hype may lead to wasted investment.
Read at www.mercurynews.com
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