AI concept stocks or “smear tide”? Experts warn that it is very similar to the .com bubble of the year

Technology stocks in the U.S. stock market have performed well this year, rising 43% from the beginning of the year to July 26, and Microsoft and NVIDIA (NVIDIA) have performed best. Many companies call AI themes, but in fact artificial intelligence blesses related products, and it still does not seem to be able to become a new main force. Experts even warn that the recent trend is more and more like the .com bubble in 2000. How long can it last? When will the bubble burst?

Are we heading for an AI bubble?

With ChatGPT sparking a boom, investors are looking forward to the large language model behind ChatGPT, which can be used by various industries. For example, Microsoft has combined GPT with its own office software, and Google has followed suit and launched Bard. Whenever a product is released, the stock price will skyrocket .

As for the chip design industry, NVIDIA (Hui Da) and AMD (AMD) are expected to benefit from this trend because they provide the GPU graphics chip “shovel” necessary to run AI. Therefore, it has been favored by the outside world recently, and Taiwan stocks including Quanta, Wiwynn, ASUS and other AI concept stocks have frequently risen. Even in fact, the proportion of artificial intelligence in the company’s revenue is still not obvious.

Under the trend of calling AI right, it is conceivable that everyone wants to be rewarded. In addition to the aforementioned big companies, many start-ups around the world have recently been looking for ways to integrate generative artificial intelligence with their own businesses; or Developed from scratch, attracted funding.

Venture Capital Crazy AIGC, Retail Crazy AI

How hot is this wave of AI dipping? “CNN” reported that in the first half of the year, venture capital institutions invested at least US$15.2 billion in AIGC (AI generated content, ChatGPT is one of them) related companies, including Microsoft’s announcement of investing US$10 billion in OpenAI in January.

But OpenAI, which developed ChatGPT, can at least prove its market position with hundreds of millions of users. In June, the French startup Mistral AI raised US$110 million in its seed round, setting a record for the largest seed round in European history. But the main reason why Mistral AI is favored is that the founder lineup is strong enough, from DeepMind and Facebook bought by Google.

In addition, Lightspeed Venture Partners, which led the investment in Mistral AI, stated that only about 70 to 100 people in the world have experience in developing and improving large language models, which is another feature. But Mistral AI is only four weeks old, has no products at all, and has no customers.

There is no product, no customers, and you can get huge amounts of money. This scenario is very similar to the “.com Internet bubble” in 2000.

The founder of Stability AI, a unicorn in the field of artificial intelligence, pointed out that this wave is a bubble

Stability AI, the unicorn that developed Stable Diffusion, founder and CEO Emad Mostaque directly described the artificial intelligence boom as “.AI bubble”. He believes that the development of artificial intelligence is not yet ready for large-scale application, such as Due to security issues, financial services are still unable to land.

But Mosdaki still affirmed the importance of AI technology, emphasizing that it is still an important market that cannot be ignored, and the importance of infrastructure construction is even higher than 5G. After Web3, investors have found generative AI as their investment target, which has spurred a series of investments from the beginning of the year to the present.

Looking further away, not only generative AI, but people are optimistic about the overall development of AI. Although various macroeconomic factors remain unchanged, such as the unfinished war between Russia and Ukraine, inflation that has slowed down but is not yet over, the possibility of continuing to raise interest rates is high, and the euro zone economy has shrunk for two consecutive months, US stocks are still affected by artificial Wisdom expects to get out of the bear market.

The .com craze in 2000 is very similar to this wave of AI, but is it still different?

As the chatGPT web traffic slows down, people are starting to worry, is the bubble about to burst?

However, Sam Huber, CEO of Metaverse infrastructure manufacturer LandVault, which has received investment from SoftBank and others, believes that although artificial intelligence and the “.com Internet bubble” are similar, they will not be regarded as the same. The similarity between the two is that there are also companies that add AI and .com to the company name, but AI has nothing to do with the Internet. For example, some companies only have ChatGPT (or API) connected to their services or products, and they call themselves AI companies. .

However, before the outbreak of generative AI, from the most basic development model for other companies to use, to the final integration into products, artificial intelligence has already appeared in clear application scenarios, such as medical image recognition, biotechnology drug exploration, financial credit scoring, etc. These actual Utility is not as speculative as it was during the dot-com bubble.

But in any case, if you distinguish between AI in the broad sense and generative AI in the narrow sense, the latter is indeed a hot topic now, and investment is relatively risky. However, the artificial intelligence investment of retail investors mainly invests in large-scale technology companies; for new ventures that use generative AI as a selling point, investors are mainly venture capital funds, and the two are not the same.

Even if retail investors cannot invest in new innovations related to generative AI, it is even more frightening to invest heavily in the stocks of large companies because many large companies hint that their business is related to generative AI and have a promising future.

Even Microsoft, which invested in OpenAI, had its latest financial report on July 25. CEO Nadella also admitted that although Microsoft is actively developing artificial intelligence, such as cloud computing, Office software, and search engine Bing, the addition of AI functions has not been clearly reflected. financial report. In other words, even Microsoft, which has grabbed the AI ​​jackpot, is like this. How high can we expect from other technology companies or AI concept stocks starting from hardware? Please be careful not to be too optimistic.