“Industrial bubble” AI But society will benefit

Turin, Italy – Artificial intelligence is currently in the “industrial bubble” but this technology is “real” and will have great benefits to society. Amazon Founder Jeff Bezos said Friday.

The term bubble usually refers to an inflated period of stock prices or a period of valuation of a company that is separated from the basics of the business. One of the most famous bubbles that burst was the 2000 dot com crash, when the value of internet companies plummeted.

Exor CEO John Elkann asked the stage at Italian Tech Week in Turin, Italy, whether there are any signs that the current AI industry is falling into a bubble.

“It’s a kind of industrial bubble,” said the Amazon founder.

Bezos laid out some of the important characteristics of bubbles and note that when they happen, the stock price is “detached from the basics” of the business.

“The second thing that happens is that people get very excited like they do about artificial intelligence today,” Bezos added.

During the bubbles, all experiments or ideas will be funded, he told the audience.

“Good ideas and bad ideas. And investors struggle in the middle of this excitement, distinguishing between good and bad ideas. And that’s probably happening today,” Bezos said.

“But that doesn’t mean that what’s happening isn’t real. AI is real and we’re going to change every industry.”

Bezos cited an example of six companies receiving billions of dollars in funding. This is “very unusual behaviour,” but this type of activity is happening today, he said.

However, the billionaire said industrial bubbles could ultimately be positive. He pointed to the biotechnology and pharmaceutical company bubble in the 1990s, leading to the development of several life-saving drugs, despite the fact that many companies were eventually destroyed.

“The industrial (bubble) isn’t that bad. It can even be good because when the dust settles and see who the winner is, society benefits from those inventions,” Bezos said.

“That’s what happens here too. This is true. The benefits from AI to society will be enormous.”

Bezos is not the only major business person to warn about the AI ​​bubble. In August, Openai CEO Sam Altman reportedly said that the AI ​​market is in a bubble and many investors are also raising the issue.

On Friday, Goldman Sachs CEO David Solomon raised several concerns about the stock market level amid the AI ​​hype.

“When (investors) are excited, they tend to think about good things that can go right, and can reduce what you should be skeptical… There’s a reset, there’s a check at some point, there’s a drawdown,” Solomon said in Italian Technology Week. “The scope depends on how long this (the bull run) lasts.”

Karim Moussalem, Chief Investment Officer of Selwood Asset Management’s Equity, said last week that “AI trade is beginning to resemble one of the great speculative enthusiasts in market history.”