It’s a bubble like we've seen before!!
As the Bank for International Settlement – BIS- the banker’s banker headline screams “AI exuberance risks ending in lengthy investment bust” so KiwiSaver managers rush to check Big Five tech exposures.
The vast amount of money poured into datacentres and essential supporting resources such as power and water to cool processors will end badly. It is a question of when not if.
The 17th century Tulip Mania bubble and 18th century South Sea bubble were precursors of what we are seeing today. Excessive exuberance by bankers and investors triggered the 2007/2008 Global Financial Crisis. There will be more as madness of crowds defy the wisdom of the wise few.
Markets cannot "kick gravity into touch" avoiding the fallout if investment premise is suspect. In this case it is the earnings projections of Big Tech and the pushback against closed AGI essential for tech giants to control to the point of nefarious to support their fairy dust. AI is with us. To succeed it will require market regulation and greater transparency as users ask “ what happens to my ChatGPT data?” The mysterious black box behind AI needs to be exposed along with all algos.