Major banking institutions can't agree on whether the AI industry is already a bubble or if we're not quite there yet. Both the Bank of England (BOE) and International Monetary Fund (IMF) issued warnings this Wednesday that there was a risk of a sharp market correction akin to the dotcom era crash if AI investor mood turned sour. They highlighted soaring gold prices as an indicator that investors were hedging their bets, according to CNBC. Goldman Sachs is less concerned, claiming that while there is a risk we end up in a bubble, we're not there yet, as per Sherwood.
The question of whether the AI industry was developing into a bubble has been raised many times in recent months following announcements of gargantuan investments in various AI companies and their infrastructure all over the world. Many of these investments have been circular, with the same companies buoying each other's stock prices and potential future revenue streams. But while some of the major faces in this industry may brush off concerns of overvaluation affecting their businesses specifically - even if it might hit others - the banks are starting to show concern.
