There’s no avoiding the hype surrounding AI these days. Promises of new developments like personal robot assistants and miracle cancer cures are ubi

AI is effectively ‘useless’—and it’s created a ‘fake it till you make it’ bubble that could end in disaster, veteran market watcher warns

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2024-07-09 17:30:06

There’s no avoiding the hype surrounding AI these days. Promises of new developments like personal robot assistants and miracle cancer cures are ubiquitous as executives take every opportunity to emphasize their AI chops to enthusiastic investors—and slightly less enthusiastic consumers.

Not everyone has been blown away by the AI fanfare, however. James Ferguson, founding partner of the UK-based macroeconomic research firm MacroStrategy Partnership, fears investors’ AI exuberance has created a concentrated market bubble that’s reminiscent of the dot-com era.

“These historically end badly,” Ferguson told Bloomberg's Merryn Somerset Webb in the latest episode of the Merryn Talks Money podcast. “So anyone who's sort of a bit long in the tooth and has seen this sort of thing before is tempted to believe it'll end badly.”

The veteran analyst argued that hallucinations—large language models’ (LLMs) tendency to invent facts, sources, and more—may prove a more intractable problem than initially anticipated, leading AI to have far fewer viable applications.