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On September 30, for the Deutsche Bank Research Institute, Adrian Cox and team wrote:
One AI bubble has already burst – the bubble in saying there’s a bubble.
The number of web searches for “AI bubble” has plummeted in the past month, according to Google Trends.
Peak “AI bubble” was on Aug 21, shortly after a little-understood report from MIT appeared to suggest that hardly any organisations were getting a return from their investment in AI, and OpenAI CEO Sam Altman said investors might be getting “over excited”, prompting a 3.8 percent pullback in the Magnificent Seven tech stocks over five days.
Since then, the number of web searches worldwide for “AI bubble” has fallen to 15 percent of that level. “AI boom” reached its own high a week earlier, at 40 percent of the “AI bubble” peak.
Deutsche’s point of the note wasn’t just to call the top of AI pessimism. Cox and team also sought to show how hard it is to time the market — a point borne out by subsequent events:
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As we said at the time, Google Trends is handy for retrofitting data around an argument. What it’s not is a reliable or even methodologically consistent predictor of future performance. So, for investment research, it’s best used sparingly unless you want snarky bloggers to make fun of your conclusions, twice.
Further reading:
— An AI chart crime compendium
— AI 101: Economy: Five ways AI is driving growth (DB)