Nvidia, one of the few companies profiting from AI, claims there is no AI bubble

[Daniel Sims]

Winners & losers: Analysts, researchers, and even some tech giants have repeatedly warned that today's AI business is becoming a bubble. A big chunk of all AI investments currently mean purchasing Nvidia's processors, and the company is working to secure its position with a flurry of new partnerships. Unsurprisingly, Nvidia's CEO is among the few who openly dismiss claims that a bubble exists.

Nvidia CEO Jensen Huang recently told Bloomberg he doesn't believe the recent AI boom has become a bubble, breaking with months of warnings from across the business world. Speaking at the company's GTC conference in Washington DC, he characterized the current moment as a virtuous cycle.

During the event, Huang announced numerous partnerships intended to accelerate the adoption of AI, which turned Nvidia into the world's first $4 trillion company.

These include a collaboration with Oracle to build an AI supercomputer for the US Department of Energy, deals to develop 6G technology for Nokia and US telecoms by using AI, a pledge to provide chips for Uber's global robotaxi expansion, and many more.

Nvidia also appears intent on protecting its leadership in AI hardware amid new competition. Qualcomm recently introduced two new server chips for AI inference, Microsoft seeks to lessen its reliance on Nvidia, and AMD is also partnering with the Department of Energy to build two supercomputers in a $1 billion project resembling Nvidia's.

The dense network of deals between companies that also depend on Nvidia has triggered criticism of so called circular investment, a classic warning sign of a market bubble. Nvidia and AMD have described the cycle as mutually reinforcing, but skeptics have drawn comparisons to the late 1990s, when interdependent tech companies helped inflate the dot com bubble to unsustainable heights.

The warnings have grown louder. Deutsche Bank, MIT, and even OpenAI CEO Sam Altman have all cautioned that the AI boom could eclipse the dot com era in scale. Deutsche Bank argues that AI spending is singlehandedly preventing the United States economy from sliding into recession, while a recent MIT report found that 95 percent of AI ventures fail to turn a profit.

Nvidia remains the outlier. Its hardware powers most of the AI data centers currently being built, and estimates now place the company at roughly 8 percent of the S&P 500.

Even if AI is a bubble – and even if it bursts – the long term value of the technology is still an open question. Wired recently drew parallels to past platform shifts like electricity, radio, and commercial aviation, each of which inspired speculative bubbles before eventually settling into the infrastructure of modern life.

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Nvidia, one of the few companies profiting from AI, claims there is no AI bubble

 

[redgarl]

You are missing the deal between AMD and Oracle, and AMD and the American Government in your chart.

 

[Axeia]

There's no bubble, in fact you should buy into it more. Just trust Jenssen, obviously he totally has nothing to lose if the bubble bursts.
Nvidia market cap off almost 3.7 trillion isn't based on mostly empty promises at all

 

[umeng2002]

They (AI ecosystem) just want to collect and repackage all the information in the world, make it harder or impossible for you to access; then sell it back to you as an AI bot subscription.

 

[gdavid65]

"it's no bubble" before the bubble bursts.. said no-one ever...

 

[wiyosaya]

fElon must be supplying Jensen with Ketamine!

 

[wiyosaya]

They (AI ecosystem) just want to collect and repackage all the information in the world, make it harder or impossible for you to access; then sell it back to you as an AI bot subscription.

More like sell it back to you and hope you do not notice that its a collection of worthless crap that AI has regurgitated.

 

[GodisanAtheist]

"It's not a bubble" says guy who has most to lose if it actually were a a bubble.

 

[Theinsanegamer]

If it walks like a duck, and quacks like a duck, but insists that it is not a duck, is it a duck?

I believe he said the same thing about crypto and NFTs a few years back too. Almost like the shovel merchant wants you to keep digging.

 

[BogdanR]

Of course it is not a bubble if you’re in the centre of it, and thing is so big you cannot see its boundary from all the cash blocking your view. Forrest for the trees concept here.
The bubble is about the only thing keeping the US economy in the black for the time being.
It is going to be mighty painful when it pops.

 

[unoficialoficial]

They've been working on quantum computing for decades with almost no results. At least AI, by reaching superhuman-level intelligence, has rendered the old dream about the foundational concept of a machine that can pass the Turing Test obsolete. So, it produces measurable results. Maybe, it will reach a point where it will be overpriced, but there will be no shuttering deconstruction (like a bubble); at maximum, there will be some corrections. The funny thing is that in such event, all they want to be the first to get out.

 

[Megalomaniac]

I remember when the know-nothings like Cramer and Wood were trying to scare everyone out of Nvidia claiming "it peaked" and the "AI bubble burst".

You have to ignore these people and HODL.

They lose so much money it's a wonder they still have jobs.

 

[AnilD]

It’s kind of poetic that Nvidia could end up being both the symbol of the AI bubble and the reason it keeps floating. Even if the hype pops, they’ll still be the ones selling shovels in the gold rush.

 

[Puiu]

"claims there is no AI bubble" - they are telling everybody to continue buying hardware. it's their main business...

 

[Gravitytr1]

That infographic is mostly filled with Israeli controlled companies. I just find that shared characteristic fascinating.

 

[Northy]

Shovel peddlers always love gold rushes

 

[ZedRM]

Jensen is shoveling more schmoo than his silly self can wade through.

 

[manowar51]

Its not a bubble for hardware manufacturers. Uses for machine learning will continue to grow and require GPUs. But LLM AI companies are absolutely in a bubble.

 

[Watzupken]

By now, it’s only the US big tech companies that are “cross pollinating “ to prolong and further inflate the AI bubble. Basically, they pay Nvidia and Nvidia pays them to buy more. To mask the high cost, these big techs then start reducing headcount by claiming that AI can do “anything”. Given that AI has been deployed for a few years now, I think we all know what it can or can’t do well.