AI 'useless,' creating a risky 'fake it till you make it' bubble
Veteran market watcher James Ferguson warns about the AI market bubble, citing risks like false information creation and high energy consumption. He advises caution in investing in AI-related stocks, suggesting value in U.S. small-cap stocks post-bubble burst.
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In a recent warning by veteran market watcher James Ferguson, concerns were raised about the current hype surrounding Artificial Intelligence (AI). Ferguson highlighted the potential risks associated with the AI market bubble, drawing parallels to the dot-com era. He expressed skepticism about the viability of AI applications, citing issues such as the creation of false information by large language models and the high energy consumption of AI technologies. Ferguson cautioned investors about the similarities between the current tech hype and the period before the dot-com crash, emphasizing the need for caution when investing in AI-related stocks like Nvidia. Despite the uncertainties surrounding the AI market, Ferguson suggested that there may still be value in U.S. small-cap stocks post any potential AI bubble burst. He recommended exploring undervalued small-cap businesses as a more stable investment option.
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2 comments1. Who is being replaced by “AI”
2. How much money are companies saving by replacing those workers
The answer to both of those questions right now is effectively zero. And although LLMs might be good for boilerplate emails and homework, that doesn’t justify the huge amount of hype and capital flowing into the industry. There will be a bust for this boom. It’ll probably coincide with the next economic downturn.
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