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AI Arms Race Concerns Investors
The recent surge in investments surrounding artificial intelligence is raising fears among investors of a potential market bubble similar to the dot-com crash of the early 2000s. OpenAI, the leader in generative AI technology, has made multiple partnerships with companies like Nvidia, AMD, Broadcom, and Oracle, funded without cash or debt, raising concerns about sustainability amidst high valuations.
Circular Investing Resurfaces
This situation mirrors past trends, notably circular investing, which contributed to the dot-com collapse. Despite rising investments, only AI hyperscalers like Nvidia may suffer if demand wanes, as firms such as Alphabet and Amazon depend mainly on their core businesses. While some analysts believe that current market valuations are unsustainable, there remains a chance for genuine economic gains as AI technology evolves.
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