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AI craze has so many parallels to the .com bubble. But unless you are all in on nVidia stock I don't think it is nearly as financially dangerous as it was. The
by rapsey 3y ago
AI craze has so many parallels to the .com bubble. But unless you are all in on nVidia stock I don't think it is nearly as financially dangerous as it was.
The biggest parallel it has is that the world of AI is like the web was in the 90s. Merely a glimpse of what is to come. VCs and angel investors are likely to get killed, not so much public markets.
.com craze had a ton of public companies being valued at outrageous numbers. Not so today, even nVidia's P/E ratio is not so crazy. During the .com craze a ton of fiber was put down which at the time could not get used. But it was used eventually. Something like that is going on with GPUs.
- johnthewise 3y agoI like the example of dotcom bubble enabling fiber investments. Hyping up internet applications enabled setting up infrastructure, which in turn made the hype real, albeit years later. I think in this wave, GPUs will be largely outdated in few years and they are not probably going to be powering up the usage by the time hype will become real. The actual utility of this infra investment I think comes primarily from money spent on RDing the next gen AI chips, which wouldn't have been possible if there wasn't any hype spending money on today's chips.
- lumost 3y agoI'm not certain that Cisco, Oracle, or other vendors ever took there crazy valuation to invest in web companies. There is a unique connection between NVidia investment and NVidia revenue. This effectively makes NVidia a leveraged investment on the AI space, however it's unclear whether all investors recognize the leveraged nature of the investment - or the portion which is funded directly out of firms like Meta ramping up their GPU buys.