With $1 Trillion in Future Investment, 'dot AI' May Be the 'Biggest Bubble', Cautions CEO of AI Company

The CEO of open-source AI company Stability AI, Emad Mostaque has made a striking claim, asserting that artificial intelligence (AI) is on the verge of creating the most substantial bubble in history. Speaking during a call with UBS analysts, Mostaque highlighted the early stages of AI development and cautioned against its premature mass-scale adoption in industries such as banking, reports CNBC. His remarks shed light on the anticipated surge in AI investment, prompting a closer examination of Mostaque's insights and their potential implications for the future of AI.

Early stages and the 'dot AI' bubble

Mostaque refers to the upcoming surge in AI investment as the 'dot AI' bubble, suggesting that it hasn't even started yet. Despite the technology's prevalence in various applications, including online browsing, social media platforms, and home assistants, generative AI has emerged as a more recent and captivating form. Tools such as OpenAI's AI chatbot ChatGPT, Google Bard, and Microsoft Bing Chat as well as image generators like Dall-E, Stable Diffusion, and Midjourney have piqued the interest of many due to their ability to produce humanlike language and visual content from scratch. 

Generative AI's impact on industries

There is a significant presence of AI in diverse sectors, including medicine, transportation, robotics, science, education, finance, defense, and more. However, the focus shifts to generative AI which has garnered attention for its creative capabilities.

Stable Diffusion developed by Stability AI is highlighted as one of the popular generative AI tools alongside OpenAI's ChatGPT. With over a million users and substantial funding, Stable Diffusion allows users to generate photo-realistic images by inputting text.

Investment landscape and market consequences

Mostaque predicts that the total investment required for AI would likely exceed $1 trillion. He argued that AI's significance as infrastructure for knowledge surpasses even that of 5G technology. In his view, banks such as UBS would have to adopt AI due to the immense market it represents. However, he tempered this outlook by stating that AI is still in its "early stages" of development. "It's not quite ready," Mostaque admitted, referring to large industries like financial services. He acknowledged the value of AI but cautioned that its mass-scale deployment would require further development.

Mostaque further asserted that companies failing to effectively utilize AI in their operations would be "punished" by the stock market. He gave reference to a recent incident involving Google which experienced a $100 billion loss in market value in a single day due to inaccuracies in a promotional video featuring its Bard AI chatbot. The fierce competition between Google and Microsoft to develop superior AI tools was also emphasized. "This will be one of the biggest investment themes over the next few years," Mostaque concluded, underlining the significance of AI in shaping future investment strategies.

The future of Artificial Intelligence

Mostaque concluded by stating that AI will be one of the most significant investment themes in the coming years. He anticipates a shift in investment focus from chip manufacturers to companies leveraging AI to impact their bottom line. Those who fail to harness AI's potential may face repercussions in the market. As AI continues to evolve and gain traction, its influence across various industries is expected to reshape business landscapes and investment strategies.

How to invest in AI 

You can invest in AI through multiple ways, like investing in individual stocks like Google and Microsoft, using robo-traders, and investing in AI funds, per Yahoo. Seeking companies like Google and Microsoft that use AI in their products and investing in them directly can help you collect their gains from this new technology. When you invest your money according to a series of goals or conditions that you establish, then a robo-trader company that offers algorithmically managed portfolios manages that portfolio based on its own software model. There’s a gold rush on artificial intelligence ETFs(Exchange Traded Funds) and you could consider top AI ETFs of 2023 like Global X Robotics & Artificial Intelligence ETF and ROBO Global Robotics and Automation Index ETF to invest in, per The Motley Fool.