Joe Lonsdale, founder of venture capital firm 8VC, recently stated that artificial intelligence... Executives in the (AI) field are deliberately downplaying the scale of resources they need to achieve their ambitious goals.
"These companies are afraid of scaring away investors, so they are telling investors that they actually need far less funding and energy than they know in their hearts," Lonsdale said in an interview on Thursday (October 30).
Lonsdale's career began as an intern at PayPal, where he met Peter Thiel and Elon Musk, and co-founded Palantir with Thiel and others. Currently, Lonsdale's 8VC manages over $6 billion in assets.
Lonsdale believes this situation will create a vicious cycle: executives will have to find new capital and resources every three to six months to support their plans. "I think we've underestimated the amount of money and resources needed to be invested in this area."
Lonsdale said he is more focused on companies that can develop "economically viable" and "profitable" applications and services, adding, "I'm creating a lot of companies in the real economy that are improving productivity."
The third-quarter earnings reports released the previous day showed that Google, Meta, and Microsoft... They have spent nearly $80 billion on AI infrastructure. Executives at all three companies said the increased spending was to address the surging demand for AI tools and services.
Google's Pichai attributed the increased spending to rising demand for cloud services, while Zuckerberg stated that the company is "aggressively ramping up" its efforts to accelerate its progress in the "super intelligence" race. Earlier in the day, Meta issued $30 billion in corporate bonds.
In recent months, tech giants have been ramping up their AI investments, building infrastructure and vying for top talent. But some skeptics worry that an AI bubble is forming, with companies overspending without a clear path to returns.
"Investors are worried that the race to dominate the market could lead to overspending," said Dec Mullarkey, managing director of SLC Management. "There's no need to elaborate on how a tech bubble can severely damage early investors."
(Article source: CLS)
