Artificial intelligence (AI) is poised to become the largest bubble in history, according to Emad Mostaque, the CEO of open-source AI company Stability AI. Mostaque shared his views on a call with UBS analysts, stating that AI is still in its early stages and not yet ready for widespread adoption in industries such as banking. He referred to it as the “dot AI” bubble and emphasized that it has not even started yet.
Stability AI is known for its generative AI tool called Stable Diffusion, which enables users to generate photo-realistic images by inputting text. With over a million users and significant investments from prominent firms like Coatue and Lightspeed Venture Partners, Stable Diffusion has gained popularity in the AI space.
While generative AI, which creates human-like language and visual content using vast amounts of data, has captured the imagination of various sectors, Mostaque’s claims have been met with some skepticism. He has been accused of making misleading statements about his background, accomplishments, and partnerships. In response, Mostaque addressed these allegations on his personal blog, refuting each claim in detail.
AI technology has already become pervasive in online browsing, social media platforms, home assistants, and numerous industries such as medicine, transportation, robotics, science, education, finance, defense, and more. Generative AI, a more recent development, powers popular tools like OpenAI’s ChatGPT, Google Bard, Microsoft Bing Chat, and image generators such as Dall-E, Stable Diffusion, and Midjourney.
Mostaque believes that AI will require a massive investment of around $1 trillion, as it is a crucial infrastructure for knowledge, surpassing the significance of 5G. He predicts that banks like UBS will have to embrace AI due to its potential in a massive market. However, he acknowledged that AI is currently in the early stages of development and not yet ready for large-scale deployment in industries like financial services.
Companies that fail to incorporate AI effectively into their operations may face consequences in the stock market, according to Mostaque. He highlighted the example of Google, which experienced a $100 billion loss in market value when its Bard AI chatbot provided inaccurate information in a promotional video upon its release. Mostaque emphasized that AI is a real phenomenon, with limited investable opportunities, and companies leveraging it to impact their financial performance will be rewarded by the market.
Mostaque concluded by stating that AI will be one of the major investment themes in the coming years. The transformative power of AI is often compared to an industrial revolution or a cognitive revolution, shaping the future of various industries and society as a whole.