If artificial intelligence is a bubble, what figures are we talking about?
Investments
Posted by MoneyController on 28.06.2024
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What if the enthusiasm for artificial intelligence turns out to be too great for the results that are to be expected? What figures would we be talking about in this case?
Artificial intelligence has undoubtedly been one of the growth drivers in the markets in recent months, at least since ChatGPT was made available to users in late 2022. This trend has caused the stock market capital of companies like Nvidia to soar, and contributed to the more general rise of American big tech companies, which have announced ambitious plans to invest in this new technology. Nevertheless, many investors are left with a question: what if it is a bubble?
In 'Market Watch' Emily Bary reports on some of the remarks of Ross Sandler, analyst at Barclays. Sandler points out this: some data may confirm, at least in part, some of the fears of those who believe that the growth of investments in artificial intelligence may be excessive; in particular, the increase in capital expenditures forecast for 2026 is $60 billion, against an expected return on the cloud of 'only' $20 billion.
Sandler calculates a total of $167 billion of investment in artificial intelligence. What is crucial, the Barclays analyst goes on to say, is whether this is an investment race driven more by the dreaded fear of being left out (the famous FOMO, 'Fear Of Missing Out') than by a real dream prospect of returns (Sandler speaks of a 'Field of Dreams scenario').
In other words: will the huge investments in artificial intelligence be accompanied by a growth in demand and a number of applications that can multiply profits, or will they turn out to be excessive when compared to the results. This is what, in 'Market Watch', Emily Bary calls a $167 billion question.
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