The AI bubble could burst — but we’ve been here before

Nvidia’s latest revenues were somehow great and inadequate. That contradiction might spell the end of the unsustainable boosterism that the tech has enjoyed, writes Andrew Griffin

- Andrew Griffin

The numbers are so high that they are almost impossible to understand.

Nvidia’s latest revenues showed it earned $47bn (£34.7bn) in the second quarter of the year, up 56 per cent on the year before. But that was not high enough, and after the results were made public, the company's share price actually fell. Of particular concern was the company's data centre revenues: up 56 per cent at $41bn, but not as much as analysts had expected.

Because Nvidia makes the chips that power many of the world's largest AI companies, its stock has become something of a proxy for the AI boom; most of the more exciting technology firms aren't listed, so investing in the chips that actually power their software is a good way to put money behind the belief that artificial intelligence will change everything.

But in much the same way, the latest drop might be a perfect illustration for the dangers behind that same AI boom: when expectations are impossibly high, and so detached from the actual reality of the technology being produced, even unprecedented successes might not be successful enough.