The similarity between this bubble and the dot-com bubble in the late 1990s worries investors and comes with high financial risks. But Bezos said the difference in nature of the current AI bubble should provide investors some solace.
“This is a kind of industrial bubble, as opposed to financial bubbles,” he said at Italian Tech Week on Friday.
Ultimately, industrial bubbles can be positive, Bezos added, pointing out that the biotech and pharmaceutical bubble in the 1990s led to the development of life-saving drugs—though in the process, many public companies that IPO’d during the boom went bankrupt or were acquired at a fraction of their starting value by the end. The cumulative net losses to public biotech companies’ bottom lines piled up to more than $40 billion, The Wall Street Journal reported in 2004.
But, Bezos said industrial bubbles are “not nearly as bad” as other bubbles.
“It can even be good, because when the dust settles and you see who are the winners, societies benefit from those investors,” Bezos said. “That is what is going to happen here too. This is real, the benefits to society from AI are going to be gigantic.”
The inevitable shakeout will be brutal, but the survivors will be the next Amazon or Google.