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Jeffrey Funk: The AI Bubble will end in financial catastrophe

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Dr Jeffrey Funk: The AI Bubble will end in financial catastrophe – The CEO Retort
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Episode Summary

I had the privilege of sitting down with veteran technologist Dr Jeffrey Funk, a retired professor and consultant with a 40-year career focused on how new technologies emerge and diffuse.

As the author of Unicorns, Hype, and Bubbles: A Guide to Spotting, Avoiding, and Exploiting Investment Bubbles in Tech (2024), I was compelled to discuss the current massive elephant in the room: the AI bubble.

Spoiler alert: the current AI hype is not all it’s cracked up to be. As you would expect,  Jeff and I dug into the current misleading AI narratives and claims made by the usual suspects, comparing it to past tech booms. Jeff is particularly focusing on the massive investments versus the meagre returns, which is the perfect recipe for disaster.

Jeff didn’t hold back on the media and academia either. He highlights how they’re fueling the hype without asking the tough questions. It’s time for a reality check.

The future of AI isn’t about flashy headlines, but real-world impact and sustainable growth.

Join the conversation, and let’s cut through the noise to focus on what truly matters in a world that seems to have lost its bearings and getting high on generative AI and data centre fumes!

Thumbnail image of persons generated with Grok AI.

Key Takeaways

(YouTube Timestamps)
  • 00:00:00 – Preview
  • 00:03:35 – The AI Hype: How it all started.
  • 00:13:51 – Technical ignorance and narcissism produce delusional claims.
  • 00:19:36 – Media’s role in perpetuating AI myths and fake valuations.
  • 00:24:03 – Is the current AI stock becoming a meme coin pump-and-dump?
  • 00:26:15 – Jeff’s 40-year-old journey through multiple tech and financial bubbles.
  • 00:35:32 – Why businesses lost their AI investments with a 95% failure rate (MIT Research)?
  • 00:45:02 – Advice for young entrepreneurs involved in innovations. Don’t overhype!
  • 00:53:32 – Tim’s argument why understanding the wider world is critical for effective business tech.
  • 00:56:01 – Academia’s wrong obsession with metrics.
  • 01:01:04 – Societal impacts and misinformation, and how the AI bubble plays a role.
  • 01:07:20 – The need for critical thinking for effective innovation, beyond mere numbers.
  • 01:19:49 – People’s disillusionment with AI is getting worse
  • 01:22:22 – What will happen when the AI bubble bursts, and how bad will it be?
  • 01:33:31 – What will be the trigger point for the AI bubble burst?
  • 01:43:36 – The true meaning of an “industrial revolution” and if AI fits the definition.
  • 01:48:57 – Is the AI bubble killing entrepreneurship?

Our Favourite Quote from This Episode

I read over 50 books of history of technology. That’s where you really find the insights of how technology improves.

References and Citations

About our Guest

Dr Jeffrey Funk

CEO Retort guest profile: Dr Jeffrey Funk

Veteran technologist and author of Unicorns, Hype and Bubbles: A Guide to Spotting, Avoiding and Exploiting Investment Bubbles in Tech (2024), Dr. Jeffrey Funk is a professor and consultant with a 40-year career focused on how new technologies emerge and diffuse.

While teaching in Japan in the late 1990s and early 2000s, he was among the first to recognise the potential of smartphones. He worked closely with several Western companies to assist with their implementation of mobile technologies.

After moving to the National University of Singapore in 2007, his research on the economics of new technology led him to identify and become a critic of the “innovation slowdown”.

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