AI Boom or Bust? – #122
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Are we in an AI bubble?
Steve reviews analysis on CapEx, AI revenues, OAI+ANT burn rates. AI revenue has to reach $trillions per annum within the next few years (an increase of > 10x; compare total global software revenue of $1.5T today), or else the current CapEx spend will turn out to be a huge misallocation.
Separately, even if total AI revenue reaches these levels, OAI and ANT could still be overvalued due to revenue/margin compression from competition with other US or Chinese labs.
Chapter Markers:
- (00:00) - Conference Takeaways
- (03:21) - AI Capability Leap
- (07:36) - Both Things True
- (08:46) - CapEx Debt Risks
- (10:31) - Trillion Revenue Hurdle
- (18:32) - Spend Plateau Signals
- (31:45) - IPO and Bubble Fallout
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Steve Hsu is Professor of Theoretical Physics and of Computational Mathematics, Science, and Engineering at Michigan State University. Previously, he was Senior Vice President for Research and Innovation at MSU and Director of the Institute of Theoretical Science at the University of Oregon. Hsu is a startup founder (SuperFocus.ai, SafeWeb, Genomic Prediction, Othram) and advisor to venture capital and other investment firms. He was educated at Caltech and Berkeley, was a Harvard Junior Fellow, and has held faculty positions at Yale, the University of Oregon, and MSU. Please send any questions or suggestions to [email protected] or Steve on X @hsu_steve.
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