AI is Not yet a Bubble

Azeem Azhar and Nathan Warren write:

A month ago, I set out to answer a deceptively simple question: Is AI a bubble?

Gauge 1 – Economic strain: Is investment now large enough to bend the economy?

Gauge 2 – Industry strain: Are industry revenues commensurate with the deployed capex?

Gauge 3 – Revenue growth: Is revenue rising/broadening fast enough to catch up?

Gauge 4 – Valuation heat: How hot are valuations? Compared to history, are stocks excessively overpriced?

Gauge 5 – Funding quality: What kind of money is funding this? Is it strong balance sheets, or fragile, flighty capital?

All these new technologies have boom and bust phases, so AI will surely become a bubble and crash.

The article makes a convincing argument that we are not there yet.