Say farewell to AI bubble, prepare for the crash

Most people not deeply involved in the artificial intelligence frenzy may not have noticed, but perceptions of AI’s relentless march toward becoming more intelligent than humans, even becoming a threat to humanity, came to a screeching halt Aug. 7.

- MICHAEL HILTZIK COLUMNIST

THE SAN Francisco headquarters of OpenAI, whose recent GPT-5 was a bust.

That was the day when the most widely followed AI company, OpenAl, released GPT-5, an advanced product that the firm had long promised would put competitors to shame and launch a new revolution in this purportedly revolutionary technology.

As it happened, GPT-5 was a bust. It turned out to be less user-friendly and in many ways less capable than its predecessors in Openal's arsenal. It made the same sort of risible errors in answering users’ prompts, was no better in math (or even worse), and not at all the advance that OpenAl and its chief executive, Sam Altman, had been talking up.

“The thought was that this growth would be exponential,” says Alex Hanna, a technology critic and coauthor (with Emily M. Bender of the University of Washington) of the indispensable new book “The AI Con: How to Fight Big ‘Tech's Hype and Create the Future We Want.” Instead, Hanna says, “We're hitting a wall.”

The consequences go beyond how so many business leaders and ordinary Americans have been led to expect, even fear, the penetration of AI into our lives. Hundreds of billions of dollars have been invested by venture capitalists and major corporations such as Google, Amazon and Microsoft in OpenAl and its multitude of fellow Al labs, even though none of the AI labs has turned a profit.

Public companies have scurried to announce AI investments or claim AI capabilities for their products in the hope of turbocharging their share prices, much as an earlier generation of businesses promoted themselves as “dotcoms” in the 1990s to look more glittery in investors’ eyes.

Nvidia, the maker of a high-powered chip powering Al research, plays almost the same role as a stock market leader that Intel Corp., another chip-maker, played in the 1990s — helping to prop up the bull market in equities.