This is another proto-post like the one about controlling risk, in that I just want to jot down an idea and come back to it later to expand (possibly invalidate) it.

So here is the AI boom / AI bubble. It is an obviously disruptive technology and we can expect a lot of money to be circulating in AI-related businesses. Huge amounts of money has already been poured into this segment while this trend was becoming more and more obvious. The cost of owning AI-related businesses have increased. They became so expensive that they might no longer be a reasonable investment despite the obvious positive outlook of the AI economy.

This feels strange. Here we have something that looks like the next big thing and yet it seems too expensive as an investment. There might be other opportunities in the AI ecosystem besides investing our money in it. Growing our AI knowledge and exploiting it might be a much better alternative to take advantage of the trend.

How I think it works:

  • AI becomes a hot topic with more and more possibilities
  • people put more and more money in its economy
  • prices of AI-related businesses go up
  • starts to look more and more like a bubble when prices become out of touch with economic reality
  • creates a risky environment for investment
  • at the same time, all the capital is looking for opportunities to work
  • who gets the money during this “bubble buildup” period? the people with skills to build new AI products
  • fundamental AI infrastructure skills seem like the low-risk & high reward area
  • resources (money) should be flowing towards people with such skills

This gets me back to my human capital vs financial capital dilemma. I’ve spent too much time in the past 1-2 years on “financial capital” topics and too little on “human capital” topics.