Key Points
- Amazon founder Jeff Bezos says the AI industry is in an “industrial bubble.”
- He says stock prices are disconnected from fundamentals, and both good and bad ideas are getting funded.
- However, he believes the underlying AI technology is “real” and will bring “gigantic” benefits.
- He compares it to past “industrial bubbles,” such as the biotech boom, which ultimately produced valuable innovations.
Amazon founder Jeff Bezos said on Friday that the artificial intelligence industry is currently in an “industrial bubble.” Still, he emphasized that the underlying technology is “real” and will ultimately bring significant benefits to society.
Speaking at Italian Tech Week, Bezos explained that the current AI boom has all the hallmarks of a bubble. Stock prices are “disconnected from the fundamentals,” investors are getting “very excited,” and both good and bad ideas are being funded because it’s hard to distinguish between them in the midst of all the hype. He even pointed to the “very unusual behavior” of tiny, six-person startups receiving billions of dollars in funding.
However, Bezos made a key distinction. He said that, unlike purely financial bubbles, “industrial bubbles” can actually be beneficial. He used the example of the biotech bubble in the 1990s. While many companies went bust, the massive wave of investment also led to the development of life-saving drugs.
“That is what is going to happen here, too,” Bezos said. “This is real, the benefits to society from AI are going to be gigantic.”
Bezos is not the only high-profile figure to warn of an AI bubble. OpenAI CEO Sam Altman and Goldman Sachs CEO David Solomon have also recently expressed similar concerns, with Solomon predicting that “there will be a reset” at some point. For now, the question is not if the bubble will pop, but what the world will look like after the dust settles.
