Recent market activity shows heightened investor fears of an AI bubble, causing significant declines in shares of AI-linked public companies such as Nvidia, CoreWeave, Microsoft, and Alphabet. Traders appeared willing to abandon positions based on broad headlines rather than nuance, using remarks about venture-backed startup risk and a study on AI pilots as justification to sell. The MIT study cited a high failure rate for pilots, prompting market overreaction despite differences between private startup dynamics and public-company fundamentals. Analysis of what companies attempt with AI and why projects fail is relevant for understanding adoption challenges and investor behavior.
Hello and welcome to Eye on AI...In this edition: DeepSeek drops another impressive model...China tells companies not to buy Nvidia chips...and OpenEvidence scores an impressive result on the medical licensing exam.Hi, it's Jeremy here, just back from a few weeks of much needed vacation. It was nice to be able to get a little distance and perspective on the AI news cycle. (Although I did make an appearance on Rana el Kaliouby's "Pioneers of AI" podcast to discuss the launch of GPT-5.
Take the supposed rationale for this week's sell-off, which were Altman's comments that he thought there was an AI bubble in venture-backed, privately-held AI startups and that MIT report which found that 95% of AI pilots fail. Altman wasn't talking about the public companies that stock market investors have in their portfolios, but traders didn't care. They chose to only read the headlines and interpret Altman's remarks broadly.
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