Amazon founder Jeff Bezos has argued that the huge surge of investment in artificial intelligence is fuelling a ‘good’ kind of bubble, delivering lasting benefits for society even if share prices collapse as dramatically as his ecommerce company’s did 25 years ago.
“This is kind of an industrial bubble as opposed to financial bubbles,” Bezos said at a tech conference in Turin on Friday, drawing parallels with the dotcom-era investment in fibre-optic cable that outlasted many of the companies who deployed it and the “life-saving drugs” that emerged from the 1990s biotech boom and bust.
“The banking bubble, the crisis in the banking system, that’s just bad, that’s like 2008. Those bubbles society wants to avoid,” he said.
“The ones that are industrial are not nearly as bad, they can even be good. Because when the dust settles and you see who are the winners — society benefits from those inventions,” he continued. “That’s what is going to happen here too. This is real. The benefits to society from AI are going to be gigantic.”
In a rare public appearance, Bezos — who is now Amazon’s executive chair after stepping down as chief executive in 2021 — was interviewed on stage at Italian Tech Week by John Elkann, the billionaire scion of Italy’s Agnelli dynasty and chair of automakers Stellantis and Ferrari.
The wide-ranging conversation included a prediction by Bezos, who is also the founder of rocket company Blue Origin, that millions of people will be living in space “in the next couple of decades”.
“They’ll mostly be living there because they want to,” he added, because robots will be more capable and cost effective than working in space. Vast AI data centres, powered by the sun, will also be built in space, he predicted.
“There has never been a better time to be excited about the future,” Bezos declared. “We are gifted to live in a moment in time where there are multiple golden ages going on.”
Asked by Elkann about parallels between the dotcom boom and the current AI fervour, Bezos recalled employees’ nervousness and investors’ distress as Amazon’s share price fell from $113 to $6 in a “very short period of time” in 2000. But despite the furore, he argued, Amazon’s stock price became “disconnected from the fundamentals” of his business, which remained strong through that period.
“When people get very excited as they are today about AI for example, every experiment gets funded, every company gets funded,” he said.
“Investors have a hard time in the middle of this excitement distinguishing between the good ideas and the bad ideas. That’s also probably happening today. But it doesn’t mean that anything that’s happening isn’t real. AI is real, it is going to change every industry.”
He added: “We don’t know how long it will take exactly but that is very real.”
Earlier at the event, Goldman Sachs chief David Solomon had warned that a lot of capital being invested in artificial intelligence will “turn out not to deliver returns”, although he said he was still unclear whether the tech market was in a bubble.
When the current cycle ends, “there will be a lot of capital that was deployed that didn’t deliver returns. It’s not different this time. We just don’t know how that will play out,” he said.
Solomon told the audience in Turin that AI’s ability to boost productivity was “very exciting”, predicting that the “business of work will be transformed by AI globally”.
But the chief executive of the most prestigious US investment bank admitted he was “not smart enough to know” if investors’ excitement over AI had turned into a bubble.
“If you were having this conversation in 1998 you would have been asking the same question but the [market] would run for another three years,” he said.
“We are at the beginning of the movie not the end of the movie,” he added. “I wouldn’t be surprised if in the next 12-24 months we see a drawdown in equity markets but that shouldn’t be surprising given the run we’ve had.”