Welcome to the future bub.

The AI sector isn’t just a bubble, claims a prominent market analyst: It’s the biggest bubble the markets have ever encountered, overshadowing all previous economic bubbles. In what seems like an outlandish statement, the analyst also asserts that the current AI boom dwarfs the dotcom bubble by 17 times and the subprime mortgage crisis by four times.

An article from the Associated Press reported that OpenAI’s valuation has now reached $500 billion, establishing it as the most valued startup in history despite never having posted a profit.

In the context of the AI boom, the analyst warns that many investors might soon experience diminishing returns, urging them to exercise caution. With billions at stake within the AI sector, the potential burst of this bubble could lead to significant economic ramifications, possibly reshaping entire eras.

“[We don’t know when LLMs might hit diminishing returns hard… we need to watch the LLM developers.]”

This wise caution stems from the implications of artificially low interest rates, which have led to the misallocation of funds, reminiscent of the pre-crash economic climate of 2008.

The report emphasizes the downside of overestimating the AI’s potential, with many skeptical analysts highlighting that AI productivity metrics may not yield the transformative results expected. Furthermore, some research indicates that large corporations are seeing a decline in AI adoption.

The verdict remains unclear—could AI truly redefine our future, or will it dwindle into another overhyped prospect? Only time will unveil the truth.