Bill Gates says we’re in an AI bubble similar to the dot-com bubble

“There are a ton of these investments that will be dead ends,” Gates said.

Bryan Bedder/Getty Images for Bloomberg Philanthropies

Bill Gates says we’re in the midst of an AI bubble.
He says it’s probably not like the “tulip mania” that took place in the Netherlands in the 1630s.
It could be like the dot-com bubble, where some companies ended up overvalued.

Are we in the midst of an AI bubble? Bill Gates thinks so.

But the Microsoft cofounder said during a Tuesday appearance on CNBC’s “Squawk Box” that it’s not a product of pure speculation.

He pointed to the example of “tulip mania” during the 1630s in the Netherlands, when the price of tulips soared for several years only to suddenly crash.

“That’s not where we are,” Gates said.

But the billionaire philanthropist does think the current bubble is akin to the dot-com bubble of the late 1990s and early aughts, when several Internet-based companies turned out to be overvalued, resulting in a significant crash.

“In the end, something very profound happened. The world was very different,” Gates said. “Some companies succeeded, but a lot of the companies were kind of me-too, fell behind, burning capital companies.”

“Absolutely, there are a ton of these investments that will be dead ends,” Gates added.

Gates also said that AI has been “the biggest technical thing ever in my lifetime.”

“The value is extremely high, just like creating the internet ended up being, in net, very valuable,” Gates said. “But you have a frenzy. And some of these companies will be glad they spent all this money. Some of them, you know, they’ll commit to data centers whose electricity is too expensive.”

There’s been growing concern about an AI bubble in recent months, with even figures like OpenAI CEO Sam Altman warning of overexcitement from investors.

Others have said those fears are overblown, and that investor excitement is adequately capturing the transformative potential of the technology.

Read the original article on Business Insider

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