Amid Valuation Concerns, Peter Berezin Says AI Tech Will Likely Become A 'Commoditized Product With Commoditized Margins'

Amid ongoing concerns about valuation in the artificial intelligence sector, Peter Berezin, Chief Global Strategist and Director of Research at BCA Research, expressed skepticism about the profitability of AI technology.

In a post on X, Berezin stated that AI does not benefit from the network effects that social media does, which could have a negative impact on sector margins.

“The reason that social media is so profitable is because of network effects. People use Instagram because that’s what others use. This does not apply to AI. When you use AI you interact with the AI, not with other users of AI,” he said.

Berezin’s comments are a follow-up to a previous post he made, where he questioned the demand for AI computation if users had to pay $50 to generate a video using the technology.

“AI will likely become a commoditized product with commoditized margins,” he said in the post.

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Also See: Nebius Unveils Platform To Run Open Models, Taking On Microsoft After $19B Deal In September

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