AI or bust? Only one part of US tech economy keeps growing, says analyst

Is the Gen AI bubble about to burst? You'd better hope not, as it appears to be one of the only major growth areas in the US tech economy, according to S&P Global. There's something of a bifurcation in the US tech sector, the financial intelligence biz says in its latest report, with a small number of very large companies that …

[EricM]

I'd challenge that

> with a small number of very large companies that are exposed to cloud and AI doing much better than the industry average.

Depends on what you understand as "being exposed" to AI ...

Companies currently throw out "comes with AI" as a pretty empty marketing term, as most of their products do not in fact contain any working functionality based on LLMs, Neural Networks, Deep Learning, e.g. "AI" in the stricter sense of the word.

People are - sadly - buying into this stuff anyway, usually shortly before they discover they got sold some crap solution from yesteryear - just with a shiny, new marketing slogan that does not mean anything real.

So companies "exposed" to AI come in two flavors:

- A) Companies using "AI" as a marketing term: Those will be punished the next time the customer purchases something

- B) Companies that have fallen for "AI"-marketing: They are on a steep leraning curve to avoid companies using the term.

Group A is in fact currently doing better - by basically lying to their customers. So "doing better" now might well create a big liability which will hurt their future financial results.

Group B will be doing better in the future as elevated cynism will help to provide some hardening against future marketing BS.

[Anonymous Coward]

Nonsense. There is no actual economic growth. It's simply a Wall Stree Ponzi scheme to get richer quick.

[ecofeco]

Pump and dump, actually.

We've seen this movie before. Many times.

[OhForF']

>companies operating in mature markets (PCs and smartphones) or sectors undergoing inventory corrections (industrial, automotive, and networking equipment) are underperforming the average.<

Without S&P we'd probably never have figured out companies in mature market on average have less growth than companies in evolving markets. Thank god for those awesame rating companies and their invaluable reports.

[An_Old_Dog]

One Word about the Gen AI/ML Bubble

"Tulips."

[Anonymous Coward]

Re: One Word about the Gen AI/ML Bubble

I'd wish they'd use the Dutch tulip stock crash (first documented in history?) in schools as a perfect example of this kind of bubble and the accompanied hypervaluation.

[Bebu]

bite him on the gluteus maximus.

words that might easily come back to bite him on the gluteus maximus.

Or those mordant words could similarly miscalculating, leave Pichai singing the soprano parts.

I guess the bookies are taking wagers whether this latest craze will make it to 2028. Probably an even money bet at the moment but to 2030 you would be tying wings to your hard earned. ;)