Is AI the ‘biggest bubble of all time’? Stability AI CEO thinks so

Before ChatGPT and generative AI, it seemed like all we heard about was the metaverse; before that, it was blockchain, NFTs, cryptocurrency, the cloud, the IoT, all the way back to the dot-com bubble and Y2K. Yet now, Stability AI founder and CEO Emad Mostaque said that he predicts artificial intelligence will be “the biggest bubble of all time” during a call with UBS analysts last week.

Mostaque claims that AI is still in its early stages and “not quite ready” for mass-scale adoption in most industries, like banking, as was the context of his call with UBS analysts, “but we can see the value.”

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“I call it the ‘dot AI’ bubble, and it hasn’t even started yet,” Mostaque explained, referencing the dot-com bubble, also known as the Internet bubble, from the late 1990s and early 2000s. The dot-com bubble saw many internet startups appear, with high valuations and optimistic investors convinced that the internet would revolutionize different industries. This resulted in a rapid rise in stock prices for internet-related companies.

The dot-com bubble burst between 2000 and 2001 when the profits failed to materialize due to overvalued, unsustainable businesses, the stock prices plummeted, and many internet companies went bankrupt.

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“This will be one of the biggest investment themes over the next few years,” Mostaque added. According to the Stability AI founder and CEO, AI is a $1 trillion investment opportunity, and companies in the financial services industry, specifically banks, should embrace AI or risk being “punished” by the stock market.

With this statement, Mostaque specifically referenced Google Bard’s disappointing initial launch, where the company lost $100 billion just one day after its AI chatbot was released and showcased putting out incorrect information.

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During the call, Mostaque discussed his perspective on the potential of AI as an investment opportunity and its significance across various industries, like banking. AI is widely used in medicine, transportation, robotics, education, and defense.

Stability AI is an open-source company behind Stable Diffusion. This generative AI image creator has gained popularity along with the growing acclaim of competitors like Bing Image Creator and Midjourney and AI chatbots like ChatGPT, Google Bard, and Bing Chat.