Benzinga and Yahoo Finance LLC may earn commissions or revenue on some articles through the links below.
Investors are “overexcited” about artificial intelligence, even as the world’s largest technology companies are expected to spend around $320 billion this year building AI infrastructure, according to OpenAI’s CEO. Sam Altman has warned.
“When bubbles pop up, smart people get too excited about a grain of truth,” Altman told The Verge recently, comparing the current AI boom to the dot-com frenzy of the late 1990s. He added that some investors could end up “burned” as enthusiasm fades, but maintained that the long-term potential of AI remains enormous.
Altman’s comments come as Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), Amazon (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOGL, GOOG) continue to compete to dominate the rapidly growing AI industry.
Don’t miss:
Microsoft announced in January that the company plans to invest about $80 billion this year in AI-enabled data centers, its largest infrastructure budget to date.
Meanwhile, Amazon, Meta Platforms and Alphabet are also increasing their capital spending. According to Amazon’s second-quarter earnings report released in July, the company is expanding its cloud infrastructure for AI-powered services.
Meta said in July that capital expenditures would range between $66 billion and $72 billion, and Alphabet said the same month that continued investment in data center infrastructure remains a major cost driver. In total, analysts estimate that total AI-related investments among major technology companies could exceed $320 billion this year.
OpenAI itself continues to expand. On October 6, at its DevDay event in San Francisco, OpenAI introduced new tools that allow developers to integrate ChatGPT into applications and workflows. The event highlighted OpenAI’s growing focus on enterprise adoption and partnerships that extend the use of its AI systems across industries.
Trend: If there were a new fund backed by Jeff Bezos that offered a Target yield of 7-9% with monthly dividends – would you invest in it??
The “AI revolution will drive a tech bull market for at least the next two to three years,” says the Wedbush Securities analyst. Dan Ives said Fortune, describing this stage as “a moment in 1996, not 1999.” While Altman seemed cautious, several analysts see continued opportunities.