Is AI in a Bubble?

🏝 TheTechOasis 🏝

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In AI, learning is winning.

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😟 Is AI in a Bubble? 😟

Last week, we saw how all the hype surrounding Generative AI was largely unmet with tangible value creation.

Investors know this, and are becoming wary of the industry's current state. ‘NVIDIA is the new CISCO’ or ‘Dot-Com Bubble 2.0 is here’ are some of the claims I’ve read in the last few weeks.

But are we really in a bubble?

To answer this, I’ve gone deep into this question and, through the gathering of as much relevant data as I could on historical patterns, public and private valuations, and the factual state of the technology, give you a no-hype, data-driven answer that, at the very least, will make you much more aware of what’s going on in AI these days and, importantly, how to react if necessary.

Readers beware, you are about to be blown away by some of the numbers. Let’s go!

Oh dear…

$7 trillion.

That’s how much Microsoft, Apple, NVIDIA, Google, Amazon, and Meta have grown since ChatGPT was launched.

The HyperScaler Dream

For reference, that’s the equivalent of the entire British, German, and Spanish stock markets… combined. In layman’s terms, the aforementioned companies together are more valuable than all public companies in those countries combined.

Of those $7 trillion, 3.2 correspond to Microsoft, Google, and Amazon, also known as the hyperscalers.

However, according to Scott Galloway, their combined net revenue creation from AI adds a mere $20 billion. Simply put, investors value their AI efforts at a whopping 160 times revenue.

But if you think those numbers are crazy, we are just getting started.

The Greatest Story Ever Told

Here are some facts about the biggest star in AI today, NVIDIA, since the start of the AI boom:

Its current valuation would make it the seventh-largest country in the world by GDP (2022 values), with a similar value to France. When the boom started, it was the 39th (Denmark).

2024 alone,…

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