Terrifying signs that the AI 'bubble' is about to burst
There are reportedly some terrifying signs that the AI ‘bubble’ could be about to burst.
This comes as experts predict how the ‘AI boom’ might be due to turn ugly.
A team of researchers at the Massachusetts Institute of Technology (MIT) are now warning that AI investments are yielding ‘zero return’ for businesses after tech stocks suffered a shocking sell-off.
In the report, experts from MIT said: “Despite $30-40bn (£22-30bn) in enterprise investment into Gen[erative]AI, this report uncovers a surprising result in that 95pc of organisations are getting zero return.”
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This includes the likes of Nvidia suffering a 3.5pc fall and data firm Palantir dropping by 9pc.
MIT’s report included a survey of 150 business leaders and 350 members of staff where the researchers found that ‘just 5pc of integrated AI pilots are extracting millions in value, while the vast majority remain stuck with no measurable P&L [profit and loss] impact’.
The report went on to reveal that ‘enterprise grade systems’ are being ‘quietly rejected’ and only ‘20pc reached pilot stage and just 5pc reached production’.
Marko Kolanovic, who is the former head of research at JP Morgan, said: “Sounds about right for a bubble.”
And he isn’t the only one to voice his concerns over the future of AI as head of OpenAI, Sam Altman, has also spoken out about tech stocks potentially being in a bubble.
Speaking to reporters at a private dinner, Altman said: “Are investors overexcited? My opinion is yes.”
The tech mogul went on to say that some people stand to lose a ‘phenomenal amount of money’.
This comes just days after Altman’s firm launched GPT-5 which was slammed by users as being an ‘unfriendly’ chatbot.
“I think we totally screwed up some things on the rollout,” Altman admitted, according to a report by The Verge.
Meanwhile, the head of ChatGPT, Nick Turley, recently appeared on The Verge's Decoder podcast, where he acknowledged that not continuing to offer the older model during the new rollout was an error of judgment.
“I think we really need to think harder about how we change and manage such a large population of users. In retrospect, not continuing to offer 4o, at least in the interim, was a miss and we’re going to go fix that and make it available to our ChatGPT Plus users,” he told host Alex Heath.
“Secondly, I was also surprised by the level of attachment people have about a model. It’s not just change that is difficult for folks, it’s also actually just the fact that people can have such a strong feeling about the personality of a model.”