"Since ChatGPT's viral success in late 2022, which drove every company within spitting distance of Silicon Valley (and plenty beyond) to pivot to AI, the sense that a bubble is inflating has loomed large. There were headlines about it as early as May 2023. This fall, it became something like the prevailing wisdom. Financial analysts, independent research firms, tech skeptics, and even AI executives themselves agree: We're dealing with some kind of AI bubble."
"After all, it's not enough to say that speculation is rampant, which is clear enough, or even that there's now 17 times as much investment in AI as there was in internet companies before the dotcom bust. Yes, we have unprecedented levels of market concentration; yes, on paper, Nvidia has been, at times, valued at almost as much as Canada's entire economy."
AI may represent an unprecedented technology bubble engineered by a convergence of viral product launches, speculative fervor, and concentrated market power. ChatGPT’s late-2022 breakthrough catalyzed rapid corporate pivots to AI and fueled widespread investor excitement. Headlines and expert commentary increasingly characterize the environment as bubble-like. Reported AI investment now dwarfs pre-dotcom internet funding by a factor of 17, and firms such as Nvidia have reached valuations comparable to national economies. A 2019 economic framework that analyzed 58 historical technological booms and busts offers criteria to assess whether a given innovation resulted in a bubble.
Read at WIRED
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