- Bret Taylor joined OpenAI’s board in November after the brief ouster of Sam Altman as CEO.
- Taylor told venture capitalist and podcaster Harry Stebbings that AI is in a bubble.
- The AI bubble, Taylor said, will be similar to the dot-com bubble of the late 1990s.
The buzz surrounding AI may echo the exuberance and excesses of the dot-com bubble in the late 1990s, OpenAI chairman Bret Taylor said in a podcast that aired Wednesday.
Taylor was speaking with venture capitalist Harry Stebbings on the latter’s “The Twenty Minute VC” podcast when he was asked if AI is in a bubble. Taylor joined OpenAI’s board in November, shortly after Sam Altman was briefly ousted and reinstated as CEO.
“I think we’re in a bubble. But I think bubbles come in different shapes, and there’s a saying by Mark Twain that history doesn’t repeat itself, it rhymes,” Taylor said of Stebbings.
“I think the AI bubble will rhyme with the dot-com bubble, and I believe that with the inevitable benefit, much of the excess of the dot-com bubble may have been justified,” Taylor added.
Most of today’s top tech companies like Amazon and Google, Taylor said, were created during the dot-com bubble.
“A large percentage of the gains in the stock market over the last 30 years have been pretty much these digital companies that were born in the dot-com bubble,” Taylor said.
“And so, I haven’t done the math on how much money was burned in that period, but I think that doesn’t mean that the excitement about the Internet’s impact on the economy was false,” he added.
“I think the same thing is likely to happen in AI. We’ll look back and laugh at some of the excesses, but I’m confident we’ll have a brand-defining, likely trillion-dollar consumer company that will come out of it.”
Representatives for Taylor at OpenAI did not immediately respond to a request for comment from Business Insider sent outside regular business hours.
Taylor, of course, is no stranger to the highs and lows of Silicon Valley.
The Stanford graduate began his career at Google in 2003 before working at Facebook and Salesforce, where he was CTO and co-CEO, respectively. Taylor was also chairman of Twitter’s board before Elon Musk took over the company in October 2022.
To be sure, the jury is still out on whether AI will live up to the hype surrounding it.
In June, Goldman Sachs published a report suggesting that the return on investment for AI could be disappointing.
“AI technology is extremely expensive, and to justify these costs, the technology must be able to solve complex problems that it was not designed to do,” Jim Covello, head of global equity research, wrote in the report. at Goldman Sachs.
But that hasn’t stopped investors from pouring funds into major AI players like Taylor’s OpenAI.
On Wednesday, maker ChatGPT announced it had raised $6.6 billion in new funding at a post-money valuation of $157 billion.
The company is now one of the world’s most valuable startups, commanding a valuation on par with publicly traded companies like Uber and AT&T.
We’ve raised new funding to accelerate our mission to ensure that general artificial intelligence benefits all of humanity. https://t.co/ya6PwCd2x4
— OpenAI Newsroom (@OpenANewsroom) October 2, 2024
And OpenAI isn’t the only company to get on the AI craze.
In May, Elon Musk’s AI startup xAI said it had raised $6 billion in a Series B funding round. Musk said his company, which is just over a year old, had a preliminary valuation of 18 billion dollars.