If you want to know whether artificial intelligence is a gigantic economic bubble, don’t just take pundits’ word for it. Major investors are now moving their money to try to protect themselves from the AI bubble popping.

cross-posted from: https://lemmy.ml/post/54396848

If you want to know whether artificial intelligence is a gigantic economic bubble, don’t just take pundits’ word for it. Major investors are now moving their money to try to protect themselves from the AI bubble popping.

For an industry that we’re told is central to our collective future, the artificial intelligence (AI) industry increasingly seems to be built on a combination of artificially inflated hopes and bad accounting.

The industry’s critics have been raising concerns about its finances for a while: the fact that most of its flagship firms are grossly unprofitable, that they’ve had to jack up their prices to try break even (leading their business customers to pump the brakes on using their products), or that many of the eye-popping investment announcements that are meant to show demand for AI is strong have actually been circular financing — meaning different AI firms cycling money to and from each other.

But none of it has seemed to slow the industry’s boom or the relentless hype machine behind it. Until now, anyway. It used to be that you mostly heard concerns about the industry’s underlying economics in newspapers, blogs, social media posts, and podcasts, and that those concerns went completely unreflected in the markets. But these concerns seem now to have finally bled over into investors’ thinking.

  • Treczoks@lemmy.world
    9·
    1 day ago

    If the banks desperately want to sell you something, you know it must smell fishy.

    They want to get the growing risk out of their portfolios, and when other banks and investors don’t want to take it, they try to find idiots in the masses instead. In Germany, they had the word “Volksaktie” (shares for the common people) for it, and yes, it was about the same, even though back then there still was some substance behind it, and not just greed and unfulfilled contracts like with the AI bubble.