“Is there an AI bubble?” is such a tired thought. Here’s something altogether more wired: The AI boom is paying off, but not in a way that the current equities market has accounted for. The success of the technology in one area of the economy could make the bubble real in another, more precisely.
In a blog post published on Friday, Apollo chief economist Torsten Slok highlighted that the parts of the AI value chain with the highest profit margins—companies making AI models and applications—actually have the lowest levels of profitability, a departure from the standard business model of, well, business, in which profit margins are higher for companies selling an end product to consumers.
