Amazon.com Inc. Chairman Jeff Bezos described current artificial intelligence investment as an “industrial bubble” comparable to the biotech and dot-com booms, predicting that, whilst many companies will fail and investors will lose money, society will ultimately benefit from breakthrough innovations.
Speaking at Italian Tech Week in Turin on Friday, Bezos acknowledged the frothy investment environment where billions flow to AI companies before they develop products, reports Bloomberg. “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,” he said.
The comments come as AI-focused businesses attract enormous valuations, with ChatGPT maker OpenAI reaching $500 billion in a recent secondary share sale and BlackRock Inc. in talks to acquire Aligned Data Centers for approximately $40 billion. So-called neocloud providers are securing funding before building infrastructure to supply technology companies with specialised AI computing power and chips.
Bezos compared the current situation to historical investment bubbles that produced lasting benefits despite short-term losses. The biotech bubble of the 1990s saw companies fail and investors lose money, “but we did get a couple of lifesaving drugs,” whilst the dot-com bubble a quarter century ago created technologies benefiting the world today.
“Investors have a hard time in the middle of this excitement distinguishing between the good ideas and the bad ideas,” Bezos explained, noting that AI will transform every industry and improve productivity for companies globally.
Some investors have expressed concern about excessive funding in the AI ecosystem, with GIC Pte’s chief investment officer warning this week about a “hype bubble” in early-stage AI venture investing.
Bezos recommended maintaining a long-term perspective on AI development. “When the dust settles and you see who are the winners, society benefits from those inventions,” he said. “That’s what’s going to happen here too. This is real. The benefits to society from AI are going to be gigantic.”
