The AI Wave: Separating Hype from Reality
As the tech world continues to buzz with excitement over AI stocks like Nvidia, seasoned investors are taking a step back to assess the landscape. Jerry Yang, co-founder of Yahoo and founding partner of AME Cloud Ventures, shares his insights on the AI wave and its potential for both growth and disaster.
A Veteran’s Perspective
Yang, who has spent his entire career betting on technology, has seen his fair share of hype cycles. “We’ve gone through a few waves of technology, and with each one, we go through this hype cycle,” he notes. Having co-founded Yahoo in 1994, Yang has experienced firsthand the exponential growth that can come with innovative ideas. However, he also warns that this growth can be followed by a crash, as was the case with the dot-com bubble.
The Advantage of Hindsight
Newer companies in the AI domain have the benefit of learning from the mistakes of their predecessors. “When we were building Yahoo, there was no playbook,” Yang recalls. “It was the Wild West, and you were trying to figure out what everything looked like.” Today, companies can draw on the experiences of pioneers like Yahoo to navigate the AI landscape.
A Similar Pathway
Yang draws parallels between the current AI hype and the dot-com bubble of the early 2000s. “By 2000, Yahoo was one of the more valuable companies for no apparent reason other than the stock market driving it up,” he explains. “And then the bubble busted, and it took a few years before all the valuations and the users and the infrastructure really caught up to the hype.” AI could be on a similar pathway, with companies like OpenAI boasting high valuations despite lacking profits.
A Reality Check
Fellow tech veteran Tom Siebel, founder and CEO of C3.ai, echoes Yang’s sentiments, cautioning that generative AI is “getting pretty frothy.” While AI has the potential to solve real problems, Siebel warns that companies like OpenAI could be gone tomorrow.
The Future of AI
Despite the potential for a bubble, Yang remains bullish on AI. “If you go now to certain parts of San Francisco, it’s AI central,” he notes. “The amount of talent and people that are starting to put not only capital but resources and energy into AI is astounding.” While the hype may be intense, Yang believes that the reality of AI will ultimately be incredible.
Stay Ahead of the Curve
For more insights from industry leaders like Jerry Yang and Tom Siebel, tune in to Opening Bid, a podcast that explores the latest trends and innovations in business and technology.
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