In a conference call with UBS analysts last week, Emad Mostaque, Founder and CEO of Stability AI, discussed his views on the potential of AI as an investment opportunity and its importance in various industries, such as banking. And he boldly predicted that Artificial Intelligence (AI) will be "the biggest bubble ever."
Stability AI is the company behind Stable Diffusion, a text-to-image model that is one of the more popular generative AI tools other than OpenAI. It has more than 1 million users and has managed to raise more than $100 million in funding from investors such as Coatue and Lightspeed Venture Partners.
Mostaque believes that AI development is still in the very early stages and is not yet ready for mass adoption in industries such as banking. "I call it the dot AI bubble, and it hasn't even started yet," Mostaque says, referring to the dot-com bubble of the late 1990s and early 2000s, also known as the Internet bubble.
During the dot-com bubble, many Internet startups emerged with high valuations; some optimistic investors were convinced that the Internet would revolutionize all industries, leading to a rapid rise in the stock prices of Internet-related companies. between 2000 and 2001, the bubble burst, and many Internet companies went bankrupt due to high valuations, unsustainable businesses, unrecoverable profits, and plummeting stock prices. Many Internet companies went bankrupt due to high valuations, unrecoverable profits, and plummeting stock prices.
But Mostaque also points to the value of the AI industry, "which is going to be one of the biggest investment themes in the next few years." He sees AI as a $1 trillion investment opportunity "because it's more important than 5G as a knowledge infrastructure." It is recommended that companies in the financial services industry, especially banks, should embrace AI technology.
He also said that companies that do not use AI appropriately in their business will receive lessons from the market. And cited Google's Bard AI chatbot as an example: it caused Google's market value to evaporate by $100 billion in one day because of inaccurate information provided at the time of its release.