When people ask if AI is a bubble, as they often do these days, the unstated assumption is that bubbles are bad. But a boom that ends badly for investors often works out just fine for the public.
A century ago, there were more than 100 automobile companies, most of which lost investors money—but out of which emerged a powerful American industry. The dot-com bubble of the late 1990s cost investors billions as companies such as Pets.com and eToys crashed and burned—but the companies that survived, like Amazon and eBay, proved that online shopping could thrive. The same is likely to be true of AI: Investors may get burned, but if AI is as important as people think it is, the bubble will have been worth it.
Indeed, according to Robert Atkinson, the founder and president of the Information Technology and Innovation Foundation (ITIF), a science and technology think tank, in the long run, it’s usually the general public that ends up being the main beneficiary of new technologies. “Gloom-and-doomers say a few gazillionaires will dominate AI. To me, that’s ridiculous,” Atkinson told me. “The societal benefit—the social rate of return—of new technologies is usually twice as high or three times as high as the private rate of return.”
