OPENAI
Bubble talk is back, and this time it’s AI
The AI boom that kicked off with ChatGPT in 2022 is now running so hot that even Sam Altman is sounding cautious.
Startups with little more than slides are raising millions, valuations are climbing to “insane” levels, and investors are rushing in.
Altman admits the market looks “overexcited,” but at the same time calls AI “the most important thing to happen in a very long time.”
Despite the warnings, OpenAI plans to keep spending aggressively, Altman says data centre costs could eventually run into the trillions.
The company has already gone beyond Microsoft’s Azure, signing a deal with Google Cloud, and is pushing for as much computing power as possible.
The rest of Big Tech is moving in the same direction.
Microsoft is now budgeting $120 billion for capital expenditure, Amazon is topping $100 billion, Alphabet is at $85 billion, and Meta has lifted its range to $72 billion.
Analysts say demand for AI infrastructure is growing at breakneck speed, with some calling this the “second inning” of a much longer game.
Not everyone sees it as a bubble.
TL;DR
OpenAI says future spending could stretch to trillions on datacentres.
Tech giants have raised capital expenditure to over $350 billion combined.
Debate continues: bubble behaviour or the foundation of long-term change?
Is this dotcom 2.0 or not?
Some argue that, unlike the dotcom crash of the 1990s, today’s companies are funding expansion from strong earnings and cash flow rather than piling on debt.
But concerns remain, Alibaba co-founder Joe Tsai, for one, has warned about speculative data centre building without clear demand.
Altman sees it as part of the normal tech cycle: some overhype and a few wipeouts, but ultimately a lasting transformation. “The value created by AI for society will be tremendous,” he says.
Tech bros are out here building datacentres like they’re Starbucks franchises.