Experts Concerned by Signs of AI Bubble

As investors pour billions of dollars into the AI frenzy, analysts are starting to become wary of an “AI bubble” that could leave investors out to dry. In a research note spotted by CNBC, tech stock analyst Richard Windsor used a colorful metaphor to describe what would happen if such a bubble were to burst. “Capital continues to pour into the AI sector with very little attention being paid to company fundamentals,” he wrote, “in a sure sign that when the music stops there will not be many chairs available.” It’s been a turbulent week for AI companies, highlighting what sometimes seems like unending investor appetite for new AI ventures. Case in point is Cohere, one of the many startups focusing on generative AI, which is reportedly in late-stage discussions that would value the venture at a whopping $5 billion. Then there’s Microsoft, which has already made a $13 billion bet on OpenAI, as well as hiring most of the staff from AI startup Inflection AI earlier this month. The highly unusual deal — or “non-acquisition” — raised red flags among investors, leading to questions as to why Microsoft didn’t simply buy the company. According to Windsor, companies “are rushing into anything that can be remotely associated with AI.” Ominously, the analyst wasn’t afraid to draw direct lines between the ongoing AI hype and previous failed hype cycles. “This is precisely what happened with the Internet in 1999, autonomous driving in 2017 and now generative AI in 2024,” he wrote. Windsor is far from…Experts Concerned by Signs of AI Bubble

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