What could kill the $1T artificial-intelligence boom?
The AI sector, valued at $1 trillion, faces threats from rapid expansion, increased investment, and evolving competition, necessitating a balance between growth and sustainable practices to mitigate risks.
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The artificial intelligence (AI) sector, valued at $1 trillion, faces several potential threats as it continues to expand rapidly. Sundar Pichai, CEO of Alphabet, highlighted the significant financial commitments required for AI infrastructure, with the company’s capital spending projected to increase by 50% to $48 billion, primarily for AI-related investments. This surge in investment raises concerns about the sustainability of the supply chain, which may be at risk of overextending. Executives are increasingly aware that the dangers of under-investing in AI could outweigh those of over-investing, suggesting a cautious approach to growth. The competitive landscape is also evolving, with companies like Baidu advancing in the autonomous vehicle sector, potentially outpacing established players like Tesla. Additionally, the ongoing race for AI dominance may lead to market volatility and increased competition, which could impact profitability and innovation. As the industry grows, it must navigate these challenges while ensuring that investments lead to sustainable advancements rather than overextension. The balance between rapid growth and prudent investment will be crucial for the future of AI, as companies strive to meet the demands of a changing technological landscape while mitigating risks associated with their ambitious expansion plans.
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10 commentsI would guess, as with self driving, the initial sprint to 95% functionality is low hanging and requiring only a few 100 billion, but the last 5.9999% that makes it more usable than a human expert is a several more trillion dollars of spend away. That human expert only costs me $250,000/yr and I can hire him by the 6 min increment. We will get there though.
Investors are throwing endless amounts of money to companies with a "dead end" product (current image Gen/LLM has a hard limit on improvement and only a whole new approach will surpass it).
Since the reality is that if we want real Ai we ought to invest in neuroscience and fields that can then convert to programmable logic (such as we can now create rudimentary emotions via logic gates).
Of course, the maddness of crowds would conclude the risk here is underinvestmemt.
When VCs sell their 2021-2023 bags, if the technology is still not yet economically self sustaining, it's over.
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