
The artificial intelligence (AI) revolution races at unprecedented speed. New data centers are shooting up like mushrooms, driven by powerful Nvidia chips and investing from Big Tech. But there are still sounds of worries. Is this explosion of investments kept? Or are we heading for a classic crash?
The dotcom bubble
In the 1990s we saw a similar situation with the rise of the internet. The promises were huge, the technology would change the world, and it is not for nothing that entrepreneurs and companies were in the unique opportunity.
Many Inter Startups saw gigantic investments, while they were still making promises instead of making value. At the same time, telecom companies laid en masse fiber optic cables, fed by the towering expectations.
The technology worked, for sure, but in retrospect the world was not completely ready for it. In 2000 the Dotcom bubble burst. Companies went bankrupt, plummeted shares, and investors withdrew. Only years later did the Internet have submitted its promise, and it is now indispensable in our world.
What does this say about AI
We can learn from the past. We are currently in a true AI hype and Nvidia dominates the chip market. The promise? AI is going to change everything. But just like in the 1990s, there is a high risk: the investments are often based on assumptions about an exponential growth that is yet to come. That is exactly what makes it so dangerous. The question is whether this is justified, or whether we will again experience a dotcom-like situation.
The recent launch of Deepseek R1, a Chinese AI model has shown that the billions of investments in data centers and AI chips may not be well -founded. The startup managed to run with old chips on high efficiency, a wake-up call for the rest of the world. It showed that AI can be cheaper, smarter and more efficient, and with that Nvidia’s stock market value on “AI’s Black Monday” collapsed by $ 600 billion. It was a signal that scalable computing power is not always the solution.
AI will fundamentally change our way of working, thinking and communicating, hardly anyone doubts that anymore. But the big question is whether that promise also realizes within the pace that many now expect. Does the current capital injection yield return on time? Or do we first get a harsh reality check, just like in 2000?
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Source: https://newsbit.nl/is-er-een-ai-bubbel-en-gaat-deze-barsten/