NEW YORK, Dec. 12 (Xinhua) -- U.S. tech giants have been spending tens of billions of dollars per quarter to beef up the computing power needed to develop and run artificial intelligence (AI) systems in the two years since ChatGPT burst onto the scene, making AI dominate investor consciousness more than any other technological breakthrough in the past two decades, reported Bloomberg News on Thursday.
"To its biggest boosters, the impact will be astonishing: AI will replace legions of workers, help researchers discover lifesaving drugs, enable companies to push into new markets and unleash vast efficiencies that will juice corporate profits for years to come," said the report. "As a result, AI-related stocks have been responsible for much of the bull market that began in October 2022."
While AI is surely promising, it isn't generating much revenue relative to the cost, noted the report.
A recent Gallup poll found that only 4 percent of U.S. workers use AI every day. More than two-thirds said they never do. Daron Acemoglu, a Nobel Prize-winning economist and Massachusetts Institute of Technology professor, has argued that common expectations around AI advances are overly optimistic.
Some investors are feeling vibes from the 1990s, when the nascent internet was generating a similar euphoria. That online transformation took a lot longer than expected, creating a big dislocation between stock prices and fundamentals that ended in an epic crash. Some Big Tech stocks are once again trading at prices, relative to their earnings, that are well above historical averages, said the report.
"Today, whether they mean to or not, most investors are making some kind of a bet on AI. Own an S&P 500 index fund? A third of your money is in eight companies, including Nvidia, Microsoft and Apple, that have staked some of their future on AI. That's not to mention tangential sectors, such as utilities, that are benefiting from AI's electricity-thirsty data centers," it added. ■