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From boom to burst, the AI bubble is only heading in one direction | John Naughton

Apr 13, 2024 - theguardian.com
The article discusses the possibility of an AI bubble, comparing the current hype and investment in AI to the stages of a bubble: displacement, boom, euphoria, profit-taking, and panic. The author suggests that we are currently in the euphoria stage, with companies investing heavily in AI despite the lack of substantial returns. The author predicts that the bubble will eventually burst, potentially due to governmental intervention, shareholder realization, or the environmental impact of AI technology.

The author uses the launch of ChatGPT as an example of displacement, and the subsequent boom as other tech companies rushed to release their own AI technologies. The author also mentions the large investments made by venture capitalists and corporations in AI startups. The article concludes with the assertion that we are indeed in an AI bubble, comparing the situation to the internet bubble of the 1990s.

Key takeaways:

  • The AI industry is currently in a bubble, going through the stages of displacement, boom, euphoria, profit-taking, and panic, similar to the stages of grief.
  • The launch of ChatGPT, an AI that can converse in coherent sentences, marked a significant point in the AI industry, leading to a boom with tech companies and startups investing heavily in AI.
  • Despite the heavy investments, AI is not yet producing significant returns, with the exception of companies that build the hardware.
  • The bubble is expected to burst eventually, possibly due to government intervention, shareholder realization, or the environmental impact of AI technology.
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