Amazon founder Jeff Bezos has shared his two cents on the massive boom in investment surrounding artificial intelligence. Bezos said that the current boom is an “industrial bubble,” but unlike financial bubbles observed in the past, this one could yield massive benefits for society.
Bezos, who is an investor in Aravind’s Srinivas AI startup Perplexity, acknowledged at the Italian Tech Week in Turin that the AI sector’s current valuations appear detached from basic business fundamentals. He said that the hype has led to an indiscriminate flow of capital, which is a classic sign of a bubble. “This is a kind of industrial bubble, as opposed to financial bubbles,” Bezos stated.
AI boom has created an industrial bubble
He explained that during these periods of excitement, investors have a hard time. “Investors don’t usually give a team of six people a couple billion dollars with no product… and that’s happening today,” he told the audience. He said that the challenge is seeing investors having a hard time distinguishing between the good ideas and the bad ideas.
Bezos pointed out that this over-funding cycle means “every experiment gets funded, every company gets funded—the good ideas and the bad ideas. That’s also probably happening today.”
Despite the speculative fever, Bezos remains optimistic about the long-term impact of the technology itself. He assured attendees that the eventual market correction will not diminish AI’s value.
Bezos says there’s nothing to worry about
“But that doesn’t mean anything that is happening isn’t real. AI is real, and it is going to change every industry,” Bezos said. He compared the situation to the dot-com era in the 1990s, where excessive investment in fiber-optic cable deployment outlasted many of the companies that installed it. Similarly, the 1990s biotech bubble ultimately ended up delivering life-saving drugs despite the failure of various startups.
“The ones that are industrial are not nearly as bad, it can even be good, because when the dust settles and you see who are the winners, society benefits from those inventions… and that’s what’s going to happen here. This is real. The benefits to society from AI are going to be gigantic,” he concluded.
