I've been at Futurism since 2017, where my role has evolved to encompass design, writing, and increasingly editing.
ArticleBody:AI companies continue to pour hundreds of billions of dollars into enormous infrastructure projects, fully expecting demand for their services to spike in the coming years to justify their outsize investments.
Reality, however, continues to have a lot of catching up to do. Revenues are still being dwarfed by astronomical capital expenditures as the gulf between the tech industry's lofty promises of an AI utopia and what the tech is actually capable of today continues to grow. And persistent fears over an AI bubble that could wreck the entire US economy if it were to collapse continue to nag Silicon Valley investors and analysts. Bill Gurley, a venture capitalist and general partner at the financial services company Benchmark, warns that the industry is still in for a rude awakening — a hard 'reset' that could hit markets hard. 'One day we're going to have an AI reset, because waves create bubbles, because interlopers come in,' he told CNBC on Monday. 'When people get rich quick, a whole bunch of people come in and want to get rich too, and that’s why we end up with bubbles.' 'One day, I just think we trip and run out of money on those things,' he added. 'I do think that moment stands in front of us.' As AI companies continue on their unprecedented spending spree, it could soon become difficult to turn things around and become profitable once many billions of dollars in debt. 'I just think it's harder to land the plane,' he said. Gurley is far from alone in warning of an imminent AI bubble collapse. Investors have warned of a 'reckoning' at which point the winners and losers could finally emerge. Former Goldman Sachs head Lloyd Blankfein, who oversaw the bank through the subprime mortgage crisis, similarly warned earlier this month that it's time to start preparing for a major jolt to the system reminiscent of the 2008 one. Not everybody sees a bubble collapse as a negative outcome. Some of the wealthiest business figures in the world argue it's simply a price to pay in the name of technological progress, as The Atlantic reported last week. One major inflection point: numerous major players in the AI industry are looking to go public this year, from OpenAI to Anthropic, in a major test that could finally blow the fuse. Elon Musk's SpaceX, in particular, which acquired the mercurial CEO's AI startup xAI earlier this year, is expected to go public at an unprecedented valuation of $1.4 trillion. One thing's for sure: the stakes are huge. Tech companies have committed to spending $650 billion on AI this year alone, accounting for a rising share of economic activity in the US. If something like Gurley's reset were to occur, it could be a boon for the winners and disastrous for the losers — a high-stakes gamble that investors are clearly hooked on. More on the AI bubble: Tech Billionaires Are Quietly Rooting for AI Bubble to Collapse
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
OpenAI in talks for $10 billion joint venture with PE firmsOpenAI is in advanced discussions to form a joint venture with private equity firms, including TPG Inc. and Bain Capital, that would focus on bolstering adoption of its AI software.
Read more »
Türkiye condemns Israeli ground invasion in LebanonAnkara warns the operation could deepen regional instability and trigger a new humanitarian disaster.
Read more »
Peter Thiel’s secret lectures on Antichrist in Rome spark debateBillionaire venture capitalist Peter Thiel has previously argued that the Antichrist is not necessarily a person but could come as a global government system.
Read more »
George Clooney's New Beer Venture Sparks Scrutiny Amidst Overseas Move and American BrandingGeorge Clooney's new non-alcoholic beer brand, Crazy Mountain, is facing scrutiny due to its Americana-themed branding and the actor's recent move to France. Critics question the authenticity of promoting American values while living abroad.
Read more »
Trump's new plan to attack cartels with military forceCartel expert warns brute force could bring more drugs and violence, suggests 'coercive diplomacy'
Read more »
Robinhood’s new venture fund just snapped up stakes in Stripe and ElevenLabsThe closed-end fund aims to give everyday investors exposure to private firms before they go public.
Read more »