The Artificial Intelligence (AI) hangover has begun.
Both Nvidia and Meta Platforms fell 10% after earnings that beat street estimates. The AI infrastructure boom is rolling on, but investors are just starting to add up the cost.
The flood of negativity is even rolling into companies that are making big money from AI applications, like ServiceNow. That stock fell 6% despite profitable revenue growth of 24%.
Some of this is normal profit taking. I suggested Nvidia shareholders might want to sell some stock even though I continue to hold some. You don’t have a profit until you sell and put the money in your pocket.
As I said yesterday there are two AI markets. One involves simple solutions, training a defined language model on a company’s own data. That’s showing sales, profits, and productivity right now.
The AI Arms Race
The other market is the AI Arms Race. It’s not just the Cloud Czars involved here. Our international competitors believe some coders and big computers replace the need for anyone but the leadership to think. Because thinking is dangerous.
This whole idea that computers “replace” minds, rather than serve them, is the real issue. I wrote about this over a decade ago, in “John Henry in Dilbert’s Cube.” Work expands to fit the resources used to do it, and this is true for mental work as well. We can now build bridges and skyscrapers because machines do the heavy lifting men once did. AI will let us make the same leaps with our minds. That doesn’t mean there will be less work, or fewer jobs. It just means they’ll be more to do.
Clouds created the standardized tools needed to build the mental bridges, trains, and automobiles of the future. AI is the first such tool to emerge. It accelerates discovery by using all the computing tools that came before. AI sends Moore’s Law spinning out in every direction AI touches.
It brings the end of oil, the machine Internet, and DNA as a programming language within reach. It’s just up to the next I.K. Brunel to harness it all
AI will do a lot more, but it’s still just a tool. It’s a bigger tool, just as an excavator is a bigger tool than a shovel. But it’s still just a tool. And the sooner we get our heads around that, the sooner progress can accelerate.
That’s the problem with the AI hangover. Cloud czars are building enormous hardware and software capabilities but can’t explain what it’s for yet. Their explanations make it sound either like word salad, or the apocalypse.
But no one in 1810 could have foreseen jet airplanes, or even subway trains. They knew it was for their children and grandchildren to design and build. They were just offering the standard fasteners and wrenches needed to design such things.
The same is true here. And now. It’s for our children and grandchildren to define the Internet, the clouds, and AI.
