Former Meta Executive Reportedly Sees 'Prominent Features' Of AI Bubble, Says Valuations In The Sector Are ‘Unbelievable’

Nick Clegg, Meta Platforms Inc.’s (META) former president of global affairs and former Deputy Prime Minister of the U.K., reportedly stated on Thursday that he sees “prominent features” of an artificial intelligence bubble.

During an interview with CNBC, Clegg called valuations in the AI sector “unbelievable” and “crazy” in what he termed as almost daily, hourly dealmaking.

“It could be, yeah, it could be. It’s certainly got some pretty prominent features of what looks like a bubble,” Clegg said when asked if he thinks this is an AI bubble.

Clegg also expressed skepticism that the large language models being developed could result in some form of superintelligence. While he said that the chances of a correction in valuations are “very high” due to these commercial and technological reasons, he thinks the underlying technology will be able to persist.

“I think if the big hyperscalers who are pouring hundreds of billions of dollars into the ground and building these data centers, if they can’t prove that they’ve got a sustainable business model to recoup that money, that’s most certainly going to raise some issues,” he said in the interview.

However, Clegg thinks that even if technology companies working on developing superintelligence are not able to achieve that goal, they will still have an option to repurpose the AI infrastructure to do something else, like telecom giants had to after the dotcom bubble burst in 2000.

Meta’s shares were up 0.37% in Thursday’s pre-market trade, while AI bellwether Nvidia Corp.’s (NVDA) shares were up 1.35%. Retail sentiment on Stocktwits around Meta was in the ‘bearish’ territory, while users felt ‘neutral’ about Nvidia.

However, Nvidia CEO Jensen Huang downplayed concerns of an AI bubble, stating that the current AI investments are part of a multi-trillion-dollar business and that this is just the beginning. “What’s going on in the world versus what happened in 2000 is just dramatically different. Back then, there were pets dot com, hospitals dot com… all of the internet companies combined were what, $30-$40 billion in size,” Huang said earlier this month.

META stock is up 23% year-to-date, while NVDA stock is up 34%.

Also See: Fed's Miran Says US Is 'Probably' Set For Three 25 Bps Rate Cuts This Year: Report

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on