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- the author, Zoe Kleinman
- the role, Technology Editor
Last month, AI chip giant Nvidia briefly became the world's richest company, overtaking Microsoft, which in turn rose above Apple.
When this news was mentioned at a tech industry event I attended in Copenhagen, the audience erupted into spontaneous applause.
As I write, Nvidia has now dropped to second place, after its share price plunged to $3tn (£2.4tn) compared to $3.4tn for Microsoft.
Two things have propelled these two American tech titans to such dizzying heights: AI and foresight.
Microsoft began investing in OpenAI, the creator of the popular AI chatbot ChatGPT, in 2019. Meanwhile, Nvidia boss Jensen Huang pushed his company into AI chip development years before generative AI hit the scene.
Both firms made a long-term bet on the current AI boom — and so far, it's paid off, with former top dog Apple trailing behind them. But how long will it last?
This year's London Tech Week, an annual event for the UK tech scene, can also be called London AI Week. The letters AI were emblazoned on every stand, and spoken in every speech.
I bumped into Anne Bowden, the founder of Starling Bank, a leading fintech disruptor. She was buzzing with excitement.
“We thought we knew who the winners and losers were. [in tech]” he told me. “But with AI, we're rolling the dice again”.
She believes she's seeing the AI revolution re-emerge in the tech sector, and she wants to dive back in.
That same week I also attended the Founders Forum, an annual gathering of about 250 high-level entrepreneurs and investors. Some serious money, in other words. It's a secret event, but I don't think I'd get in too much trouble for saying that most of the chat there was also centered around AI.
Life really comes at you fast.
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“Given how high valuations have jumped for tech companies, further missteps could cause a big shake-up in share prices,” warned Susannah Streeter, head of money and markets at investment firm Hargreaves Lansdown.
“Just like the dot.com bubble, over-exuberance risks spilling over into pessimism.”
In 2023 you'd be forgiven for thinking that anything with the acronym AI in it was guaranteed to open a lucrative seam of funding, with investment dollars pouring into all things AI. I will be swept away.
My friend Saurabh Dayal, based in Scotland, identifies AI projects for his investment firm to potentially support.
He said he soon tired of the misleading pitches.
“I spend a lot of time saying '… but it's not AI,'” he tells me.
It seems that both investors and clients are finally becoming more sane for the term AI, and as a result, more playful.
In addition, there has been increased awareness of existing generative AI products that don't quite live up to their hype. Mistakes, misinformation, bias, copyright violations and some content that is just plain weird.
And early AI-powered physical devices like the Rabbit R1 and Humane Pin have received poor reviews.
“We're just seeing the market around generative AI mature a little bit – early experiments set a lot of high expectations, but when the rubber hit the road, there were a lot of unsettled ones,” says Chris Weston, chief digital and information officer at The expected results came in,” says Chris Weston, chief digital and information officer at tech services firm Jumar.
“A lot of business value is tied to goodwill – the trust and comfort their customers have in their services. Introducing invincible chatbots is still a long way off for many.”
Tech analyst Paolo Pescatore agrees that AI firms are under pressure to deliver on their promises. “The bubble will burst when one of the giants fails to show any meaningful growth from AI,” he says.
But he's not sure that's going to happen anytime soon.
“Everyone is still jockeying for position, and all companies are building their strategies on AI,” he added.
“All players are ramping up their activities, increasing spending and claiming early successes.”
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Another reason for the AI bubble to pop. It has nothing to do with the quality of the products or their market value. It is whether the planet itself can afford it.
A study published last year predicted that if growth continues at its current rate, the AI industry could consume as much energy as a country the size of the Netherlands by 2027.
I interviewed Professor Kate Crawford from the University of Southern California for the BBC's TechLife podcast, and she told me that worrying about the electricity, energy and water needed to power AI kept her awake at night. .
Dr. Sasha Lucioni of machine learning firm Hugging Face is also worried.
“There just isn't enough renewable energy to power AI right now — most of that bubble is fueled by oil and gas,” she says.
The hope is that this technology can be used to identify sustainability solutions, such as the secret to nuclear fusion, the way the sun gets its energy. But that hasn't happened yet, and in the meantime, “AI systems put a lot of pressure on energy grids that are already under a lot of pressure,” says Dr. Lucioni.
With so much uncertainty, few would bet against another turnaround at one of the world's richest firms. But for now, Apple has a battle to compete with Microsoft and Nvidia in the AI race.