Is there an AI bubble? No

Like past transformative technologies, from railroads and radio to the internet, artificial intelligence has attracted optimistic investors and inflated valuations, and with them speculation of a bubble market—when eager investors drive up asset prices beyond their underlying values. Is there an AI bubble? No, but some tech companies show signs. No, but some tech companies show signs by Louis DiPietro, Cornell University edited by Robert Egan Robert Egan Senior Editor Meet our editorial team Behind our editorial process Editors' notes This article has been reviewed according to Science X's editorial process and policies.

Editors have highlighted the following attributes while ensuring the content's credibility: fact-checked trusted source proofread The GIST Add as preferred source Credit: Unsplash/CC0 Public Domain Like past transformative technologies, from railroads and radio to the internet, artificial intelligence has attracted optimistic investors and inflated valuations, and with them speculation of a bubble market—when eager investors drive up asset prices beyond their underlying values. The AI sector is not in a bubble market, but the prices of some individual AI companies—including Alphabet, Google's parent company—behave with the price variability and exuberance characteristic of a bubble, according to new Cornell research. "We hear the term 'bubble' used frequently, but the more important question is whether we can identify and quantify the underlying characteristics associated with one," said Martin Wells, the Charles A.

Alexander Professor of Statistical Sciences in the Cornell Ann S. Bowers College of Computing and Information Science and in the ILR School. "Our analysis suggests that some segments of AI-related companies exhibit characteristics consistent with speculative bubble dynamics, while others do not.

Treating 'AI' as a single category therefore obscures important heterogeneity across firms and sectors." Alphabet stands out Wells and Abir Sarkar, a doctoral student in the field of statistics, are the authors of "Is There an AI Bubble?