The AI bubble

Last week’s news in tech has been around Sam Altman saying that there is definitely an AI bubble and that a lot of investors will get burned. Like always, the media made it a lot more controversial than it really was. This is the consensus among pretty much all investors.

Bubbles always form when there’s a new technology put out there. For every winner, there’s going to be 10s of losers out there where people will lose money. On one hand, that is the nature of venture capital.

At the same time, this admittedly feels a bit crazier with the valuations of these companies where they are at. The size of the bubble is definitely much bigger today than it was in previous bubbles such as crypto or social media. At the same time, these companies are also making and growing faster than we’ve ever seen before.

Ultimately, I think this all ends very similar to how the last bubbles ended. We’ll go through the peaks and valleys, but ultimately there will be a few very large game changing companies out there. And there’s going to be a lot of companies that don’t make it. That part to me is the easy part. The bigger question is when and how.