In the good old days – and, incidentally, today is part of the good old days, about which you will one day reminisce nostalgically – a bubble was simply something we, as children, played with; happily blowing bubbles into the air, ideally towards the next-door neighbours’ faces as they came out of their gate. The bubble later became what we, as teenagers, would provide after chewing the gum.
When stock markets emerged and grew, the bubble took on a new and potentially haunting dimension. Not in respect of its creation, but for the fear of it bursting. Over the years, there were plenty of examples. One such in recent times was the ‘dot.com bubble’, which grew and grew in the five years from 1995–2000 and eventually burst in 2001 – 2002. It involved the advent of a huge increase in internet services and growth of technology companies.
Many dot-com start-up companies attracted vast amounts of money from venture capitalists and individuals out to make a fast buck or two. It was all about potential profits in the intangible future. People got over-excited about it and as the share prices of dot-com companies sky-rocketed, everyone thought this was the true measure of a company’s value, rather than the traditional measurement of net profits and resultant net assets. Investors continued to pour money into companies that were full of debt and empty of profit. Even today, the multibillion fortune, owned by so many individuals, will often be the market value of personal shareholdings, which remain vulnerable.
In a period of financial caution in 2001, a small rise in interest rates and minor economic recession caused investing companies and lending institutions to get worried. Then, with many dot-com companies having flawed business models and unable to attract the investment funds to finance massive growth programmes, the panicked selling of shares took off; and companies simply went bust. The Nasdaq Composite Index in the USA dropped from 5 048 to 1 139 between 2000 and 2002.
We now see Mark Zuckerberg take to the podium, proudly charming the audience through his artificial intelligence (AI) glasses and with Bill Gates joining the chorus of the competing tech-giants, predicting the dominance of AI and the imminent demise of the smartphone. It makes you turn on a 50 cent piece and head off for a tiny Pacific island.
The sequence of events and inventions attract the inevitable question – will we see another bubble involving the all-embracing AI? Zuckerberg is now the AI ‘glasses-man’ while Gates favours innovation in areas such as AI-powered clothing and electronic tattoos. These would monitor one’s health, access the internet and make payments. No need to walk around holding a phone. The smartphone had its boom in the 2010s, survived any risk of a bubble and being allowed to rest quietly and comfortably on a plateau of much lower but continuing demand.
Now it’s the AI companies that are receiving the really massive investment – hundreds of billions of US Dollars – and as with the dot.com boom, the investment is based on what is being called ‘transformative potential’, rather than profitability and asset strength; those being the traditional assessment of a company’s value. Amazon, Google, Meta and Microsoft are planning an outlay this year alone of US$320 billion, mostly on AI infrastructure. AI-powered ChatGPT – a diction bedfellow of ‘deteriorate’- was launched only two years ago and is already worth US$500 billion. Time for another ‘bubble and burst?’. A financial one is always possible but AI itself is here to stay. The ChatGPT app has become very popular; and rightly so. No, I don’t use it for my articles!
The big-boy tech-giants won’t just sit back in their luxurious private estates. There’s always a rivalry, unspoken but lurking in plain sight; like the tussle between Zuckerberg and Elon Musk over another AI application – humanoid robots. It’s one thing being able to go back in time and impress family by calling gogo in Australia by mobile phone in 30 seconds. However, more like a massive shock for them – still in the future for us – will come from seeing AI leading robots into watching and then mimicking human beings performing many tasks.
So, it’s become probable that robots, currently limited to such activities as fixing car parts on an assembly line, will start to perform functions using improved mobility and dexterity as well as cognitive skills, to be then shared with their human competitors. There will be opportunities in retailing – assisting customers and processing transactions – security work, education, hospitality and even entertainment. Musk’s Tesla company has a head start in robotics because its self-drive vehicles have computerised vision and navigation skills. Musk sees humanoid robots as a ‘natural evolution’ and predicts there will be 20 billion, yes, billion, humanoid robots at work in the world by 2040. Ouch!
Although Zuckerberg’s Meta company has not made a firm statement on its robot ambitions, its activities suggest a commitment there. It has hired staff to oversee a new robotics programme and already producing spectacles with a built-in camera that will record what the individual sees and the humanoid robot remembers and replicates. Meta AI tells you, one step at a time, how to cook a chicken meal, saving the video of it that trains a robot to do the same task later. Zuckerberg is confident of the increasing role of AI in robotics and other areas of new technology. He won’t sit on his hands.
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