The rise of artificial intelligence (AI) has generated a wave of excitement and expectations that, according to Robin Li, CEO of Baidu, may be reaching a critical point. Li has warned that the Artificial Intelligence industry is in a bubble similar to the one experienced by the technology sector during the dot-com crisis in the late 1990s, and predicts that only 1% of AI companies will survive when that bubble bursts.
In a recent statement, Li expressed that artificial intelligence, like other emerging technologies, has sparked an initial excessive enthusiasm. This enthusiasm has led many companies to get involved in the development of AI models, resulting in a proliferation of companies in the sector. However, Li believes that many of these companies will not be able to sustain themselves in the long term.
Success and risks of AI
The early success of tools like ChatGPT, which popularized the concept of generative AI, caused both large companies and startups to compete in this field. Companies like NVIDIA, whose graphic processors (GPUs) are key in training AI models, have seen a massive increase in demand and the value of their products. Since late 2022, investment in AI has been consistent, with millions of dollars flowing into the development of more advanced technologies.
Despite this success, Li warns that expectations around AI have grown disproportionately. “We are in a kind of race to see who develops the best artificial intelligence,” said Baidu’s CEO. However, the problem, according to Li, is that many of these companies do not have sustainable business models or products with real demand. When the speculative bubble bursts, only those companies that have allocated significant resources or that are essential in the technological ecosystem will survive.
A parallel with the dot-com bubble
Li compared the current situation of AI with the dot-com bubble that burst between 1999 and 2000, a period in which many internet companies could not sustain themselves despite the initial fever for the new technology. “We have seen this before,” Li commented, referring to how emerging technologies like the internet and mobile telephony have gone through similar phases of overexposure followed by drastic market corrections.
According to Baidu’s CEO, AI companies that survive this crisis will offer products and services that truly add value. “The companies that remain will be the ones focused on launching profitable and sustainable technologies in the long term,” Li noted.
The future of AI and the job market
Despite the warning about the bubble, Li believes that artificial intelligence has the potential to bring about profound transformations in the job market in the next 10 to 30 years. According to Baidu’s CEO, AI will not only change the way companies operate but also redefine the nature of human work.
Li concluded by affirming that, although the AI sector seems to be cooling down compared to the previous year, this is a sign that the market is maturing. “It is a necessary process to separate real innovations from merely speculative ones,” he said, anticipating that the companies that manage to surpass this adjustment phase will drive the future of technology.