{"text":[[{"start":12.31,"text":"When a chief executive asks for trillions, not billions, when raising funds you know a sector may be getting a bit too hot. "}],[{"start":19.64,"text":"In the long run, generative artificial intelligence will transform many industries and the way people work. "},{"start":25.469,"text":"But a report that OpenAI chief executive Sam Altman is talking to investors about an artificial intelligence chip project has raised a lot of questions. "}],[{"start":33.74,"text":"A person familiar with the talks was cited as saying the project could require raising as much as $7tn. "},{"start":40.069,"text":"Scoring even a fraction of that figure — more than the combined gross domestic products of the UK and France — would seem a stretch, to put it mildly. "}],[{"start":49.06,"text":"Nonetheless, it reflects just how hot the interest in AI, and the chips that power it, has become. "},{"start":55.277,"text":"The historical parallel that record-high AI-related stock valuations and fundraising targets bring to mind is the boom and bust in telecom stocks during the dotcom bubble era. "}],[{"start":65.08,"text":"Back then, investors had expected the internet to transform the world. "},{"start":69.484,"text":"Telecoms companies and hardware suppliers would then be big winners. "},{"start":73.189,"text":"The problem was the sector’s valuations were pricing in that transformation to come almost overnight. "},{"start":78.294,"text":"Now, a similar level of optimism is driving investment in AI-related companies. "}],[{"start":84.14,"text":"When the internet first became widely used, networking hardware was king. "},{"start":88.544,"text":"Servers needed to be built and connected using routers. "},{"start":91.599,"text":"Companies began building and buying hardware on the basis that extreme demand for servers would continue indefinitely. "},{"start":97.417,"text":"Telecom gear stocks such as Cisco surged more than 30-fold in the years to its 2000 peak. "}],[{"start":103.68,"text":"But the collapse of the telecoms industry came earlier than expected — taking just four years to go from boom to bust — and much faster than the internet changed our lives. "},{"start":112.47200000000001,"text":"Oversupply pushed more than 20 telecom groups into bankruptcy by 2002. "},{"start":117.21400000000001,"text":"Shares plunged. "}],[{"start":119.5,"text":"Now, in the world of AI, chips are king. "},{"start":122.904,"text":"Thus, the rush for AI companies to own more of the chipmaking supply chain is understandable. "},{"start":128.272,"text":"As AI models become larger, more chips are needed. "},{"start":131.727,"text":"A continuing shortage adds urgency. "}],[{"start":135.04,"text":"Yet how long these shortages will last is debatable. "},{"start":138.16899999999998,"text":"It has been just two years since the world’s car industry was brought to almost a standstill because of a severe shortage of automotive chips. "},{"start":144.92399999999998,"text":"It took less than a year for that crunch to ease. "},{"start":147.60399999999998,"text":"Today, the supply of auto chips has not only normalised but many types are in a glut. "}],[{"start":153.54999999999998,"text":"The biggest risk of throwing too much cash, too fast, at AI chips is overcapacity. "},{"start":159.04199999999997,"text":"That is already a problem for older-generation chips. "},{"start":162.009,"text":"With the current sector downturn lasting longer than expected, Samsung had to slash production last year to deal with a deepening chip glut. "},{"start":169.189,"text":"Japanese peer Kioxia posted a record $1.7bn loss for the three quarters to December. "},{"start":175.04399999999998,"text":"Adding to this, more than 70 new fabrication plants are being built. "}],[{"start":null,"text":"
"}],[{"start":180.17,"text":"Meanwhile, global silicon wafer shipments fell 14.3 per cent last year. "},{"start":185.41199999999998,"text":"Part of that is because of a cyclical downturn in the chip sector and a decline in demand for consumer electronics. "},{"start":191.16699999999997,"text":"But a slump in global chipmaking equipment billings, which fell more than a tenth in the third quarter, suggests future chip sector growth will remain at a more normalised level than what the AI boom has made us believe. "}],[{"start":202.48,"text":"Another problem is that chips quickly become commoditised. "},{"start":205.99699999999999,"text":"Take, for example, the older 40nm chips used in home appliances. "},{"start":210.827,"text":"These are hardly in short supply today, but they too were scarce, cutting-edge resources when they were launched in 2008. "},{"start":217.54399999999998,"text":"As capital equipment depreciates, the price of older-generation chips falls. "}],[{"start":222.92999999999998,"text":"Chips get faster and software more efficient every year. "},{"start":226.44699999999997,"text":"It took just two years for chips to upgrade from 7nm technology to the advanced 5nm used in the latest Nvidia chips. "},{"start":233.81399999999996,"text":"That rapid technological progress means companies may end up spending much less on chips in the future than they forecast today. "}],[{"start":240.79999999999998,"text":"It is true there are clear differences between the dotcom era and the AI boom. "},{"start":245.29199999999997,"text":"For example, OpenAI’s revenues have already surpassed $2bn on an annualised basis, joining the ranks of tech’s fastest-growing platforms in history months after its launch. "},{"start":255.30899999999997,"text":"Today’s companies also have more ways to make profits. "}],[{"start":258.85999999999996,"text":"But as with the early days of the internet, broader enterprise adoption of AI remains some way off. "},{"start":264.38899999999995,"text":"The transformation triggered by AI may take many years longer than today’s stock prices and funding expectations suggest. "},{"start":271.05699999999996,"text":"Hype and overinvestment are a dangerous combination. "},{"start":273.97399999999993,"text":"The way to avoid a similar fate to overhyped peers from the 1990s is to remember history repeats. "}],[{"start":279.46,"text":""}]],"url":"https://creatives.ftacademy.cn/album/142313-1707907249.mp3"}