Derek Thompson

I'm personally still very concerned that AI is a bubble.

And for me, the sticking points are probably two things.

Number one, I just don't think that incoming revenue will arrive on time to offset these investments.

It just seems too improbable that companies like OpenAI become 20, 50, $100 billion revenue gushers in the next few years, but something quite like that is necessary for them to justify current valuations.

And then that leads me, I guess, to number two, which is that I don't think these valuations are going to make sense in three years.

And when you add an investment correction, the fact that these companies are going to have to pull back their spending, to an asset value correction, the fact that OpenAI is not worth, say, half a trillion dollars, well, that's a bubble.

An investment correction and an asset value correction, that's a bubble.

So just humor me here for the end.

Let's say that in the next few years,

Your gauges move from the green to the yellow to the red.

And you and me and Paul and everybody else in the world, everybody agrees that we are looking at a definitive bubble.

What do you think a bust in AI looks like?

I like how you added sort of a third door for listeners and for myself to open.

If door number one is AI is a bubble and it's a catastrophe, and door number two is AI isn't a bubble and it's fine, you've outlined door number three.

AI might be a bubble and that's okay too.

that in the short run, we will have a price correction, but that price correction will, just as with the dot-com bubble, essentially create cheaper infrastructure for other companies to build something like the YouTubes and Netflixes of the future that took advantage of fiber optic cable that was late in the 90s, early 2000s.

And we will be grateful for this build-out, just as we are grateful for many bubbles that have happened in American history.

I'm not telling...

listeners or you or myself what door to walk through, but it is interesting to consider all three doors.

Azim Azhar, thank you very much.