The AI Hype Cycle: The Coming Bubble and Why Investors Are Still Clueless
Alright, so Bridgewater's Greg Jensen is out there saying the AI bubble ain't popped, it's just getting started. Says we haven't grasped how "transformative" AI will be. Give me a break.
The "Transformative" Hype Machine
Transformative, huh? That's what they always say. It's the same song and dance every single time some new tech comes along. Dot-com bubble, crypto mania, now this. It's always "transformative." What's actually transformative is how easily people fall for this crap.
Jensen claims investors haven't grasped the scale of the coming AI revolution. Maybe he's the one who hasn't grasped that the market is driven by hype and speculation, not some deep understanding of algorithms. I mean, seriously, are we all just supposed to blindly trust the guy who's been "working with machine learning" for a decade? So what? I've been eating pizza for three decades, doesn't make me a chef.
He's also saying we're entering a "more dangerous phase" with scarce resources and crazy competition. Well, no duh. When there's a gold rush, everyone scrambles for picks and shovels. Only difference is, this gold rush is powered by electricity and lines of code. And who benefits? The same people who always do: the ones who already have the power and the capital.
Existential Stakes and Talent Bottlenecks
And then there's the whole "existential stakes" thing. Musk, Altman, Google... they all think AI will control the universe in a few years. Right. And I'm gonna be the King of England. These guys are so deep in their own echo chambers, they actually believe this stuff. Or maybe they just want us to believe it so they can keep raking in the cash. Which one is it? Is it naivete or greed? Offcourse, it's probably both.
This talent bottleneck Jensen mentions is just another way of saying "we need more cheap labor." Fewer than a thousand truly cutting-edge AI scientists? That sounds about right. And they're probably all working for the same five companies, making obscene amounts of money while the rest of us worry about paying rent.
AI spending adding one percentage point to US GDP growth? That's nice, I guess. But what about the jobs that are being automated away? What about the ethical implications of letting algorithms make decisions that affect our lives? Nobody seems to be talking about that.
Speaking of money, Jensen points out that US equities, excluding big AI names, are underperforming. Translation: the whole market is being propped up by a handful of companies riding the AI wave. When that wave crashes, and it will crash, it's gonna take a lot of unsuspecting investors with it.
It's all starting to sound like the dot-com bubble 2.0.
Bill Gates and Michael Burry are raising the same concerns. But, honestly, who's listening? Everyone's too busy chasing the next get-rich-quick scheme to care about the long-term consequences. Nicolai Tangen comparing the AI talent market to sports transfers? It's apt, but it also highlights the absurdity of the whole thing. We're treating AI researchers like they're LeBron James, and it's just...weird.
I'm not saying AI is useless. It has potential. But the level of hype and the sheer amount of money being thrown at it is insane. It's unsustainable. It's a bubble waiting to burst. Then again, maybe I'm just a grumpy old cynic who doesn't understand the future. Nah.
So, What's the Real Play Here?
The whole thing stinks of a manufactured frenzy. They want us all to believe in the AI revolution so they can keep pumping up the stock prices and consolidating power. I'm not buying it. I'm not saying AI won't change things. I'm saying it won't change things in the way they want us to believe. It'll make a few people obscenely rich and leave the rest of us picking up the pieces. That's how it always goes.