At the recent Consumer Electronics Show (CES), Nvidia CEO Jensen Huang highlighted the explosive growth of artificial intelligence (AI), with Nvidia’s value soaring by 300% over two years. However, he sought to calm investor fears of an AI bubble, stating that the market’s potential remains strong, a sentiment echoed by industry leaders including White House AI advisor David Sacks. Despite these claims, skepticism looms as venture capitalist Paul Kedrosky underscored the speculative nature of the AI investments. Major companies, including Amazon and Microsoft, are allocating around $400 billion this year for AI infrastructure, often financing with risk-laden debt. Analysts caution this could lead to a crisis reminiscent of the dot-com bubble if demand fails to meet expectations. The circular investment deals, such as Nvidia financing OpenAI’s data center operations, further cloud the outlook. Many in tech acknowledge over-exuberance in the AI market, indicating potential vulnerabilities ahead.
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