AI will be the ‘biggest bubble of all time’: CEO of Stability AI

Emad Mostake, founder and CEO of Stability AI, speaks during the Bloomberg Technology Summit in San Francisco, California, U.S., Thursday, June 22, 2023.

David Paul Morris | Bloomberg | Getty Images

Artificial intelligence will be the biggest bubble of all time, according to the CEO of open source AI company Stability AI.

Speaking to analysts at UBS last week, Stability AI CEO Emad Mostake said of AI: “I think it’s going to be the biggest bubble of all time.” He added that it is still in its very early stages and is not yet ready for mass adoption in areas such as banking.

“I call it the ‘dot AI’ bubble, and it hasn’t even started yet,” he said.

Stability AI is the company behind Stable Diffusion, one of the other more popular generative AI tools besides OpenAI.

Stable Diffusion allows users to create photorealistic images by typing text. It has over a million users and has raised over $100 million from investors including Coatue and Lightspeed Venture Partners.

Mostaque, its co-founder and CEO, was accused of making false statements about his background, achievements and partnerships. He disputed the claims one by one in a detailed response on his personal blog.

Generative AI has captured the imagination of many scientists, boardroom executives, and even schoolchildren with its ability to generate human language and visual content from scratch in response to user prompts using vast amounts of data.

Artificial intelligence has been around for a long time, and the technology is now a common feature of internet browsing, social media and home assistants. In addition to consumer applications, the technology is used in medicine, transportation, robotics, science, education, finance, defense, and other fields.

However, a newer form of AI that has emerged recently is generative AI, which is used in tools such as the popular AI chatbot ChatGPT from US tech firm OpenAI, as well as Google Bard and Microsoft’s Bing Chat , as well as image generators such as Dall-E, Stable Diffusion, and Midjourney.

Mostak said the total investment needed in AI was likely to be $1 trillion “because it’s more important than 5G as an infrastructure for knowledge,” and suggested that banks such as UBS would have to adopt this technology as it is a “huge market”.

But, he added, it is currently at an “early stage” of development.

“It’s not quite ready yet” for large-scale deployment in large industries like financial services, “but we see the value,” Mostak said.

Mostak said that companies that improperly use artificial intelligence in their business will be “punished” by the stock market.

He cited as an example Google, which lost $100 billion in a single day after its Bard AI chatbot provided inaccurate information in a post-release promotional video. Google competes aggressively with Microsoft to win the race to create the ultimate AI tools.

“I think it’s real. I think there’s not a lot of investment opportunities here, and you’re going to see people moving from the top chip makers to companies that are using that to impact their bottom line and bottom line in a way that’s appropriate. And you the market will punish those who don’t use it,” Mostak said.

“This will be one of the biggest investment themes over the next few years,” he added.

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