A Signal That Money People Are Really Worried about AI Payoffs

July 8, 2024

green-dino_thumb_thumb_thumbThis essay is the work of a dumb dinobaby. No smart software required.

AI’s $600B Question” is an interesting signal. The subtitle for the article is the pitch that sent my signal processor crazy: The AI bubble is reaching a tipping point. Navigating what comes next will be essential.”


Executives on a thrill ride seem to be questioning the wisdom of hopping on the roller coaster. Thanks, MSFT Copilot. Good enough.

When money people output information that raises a question, something is happening. When the payoff is nailed, the financial types think about yachts, Bugatti’s, and getting quoted in the Financial Times. Doubts are raised because of these headline items: AI and $600 billion.

The write up says:

A huge amount of economic value is going to be created by AI. Company builders focused on delivering value to end users will be rewarded handsomely. We are living through what has the potential to be a generation-defining technology wave. Companies like Nvidia deserve enormous credit for the role they’ve played in enabling this transition, and are likely to play a critical role in the ecosystem for a long time to come. Speculative frenzies are part of technology, and so they are not something to be afraid of.

If I understand this money talk, a big time outfit is directly addressing fears that AI won’t generate enough cash to pay its bills and make the investors a bundle of money. If the AI frenzy was on the Money Train Express, why raise questions and provide information about the tough-to-control costs for making AI knock off the hallucination, the product recalls, the lawsuits, and the growing number of AI projects which just don’t work?

The fact of the article’s existence makes it clear to me that some folks are indeed worried. Does the write up reassure those with big bucks on the line? Does the write up encourage investors to pump more money into a new AI start up? Does the write up convert tests into long-term contracts with the big AI providers?

Nope, nope, and nope.

But here’s the unnerving part of the essay:

In reality, the road ahead is going to be a long one. It will have ups and downs. But almost certainly it will be worthwhile.

Translation: We will take your money and invest it. Just buckle up, butter cup. The ride on this roller coaster may end with the expensive cart hurtling from the track to the asphalt below. But don’t worry about us venture types. We will surf on churn and the flows of money. Others? Not so much.

Stephen E Arnold, July 8, 2024


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