Will AI Expectations Outrun Results?

The future looks bright for artificial intelligence, if you read the press releases, prognosticators and partisans. It looks a lot darker if you listen to the luddites and conspiracy theorists – and apocalyptic if you read any science fiction.

But there is another dimension to the AI craze that is both more practical and far more relevant: the financial dimension. Billions and billions of dollars are flowing into AI projects from small startups to multinational corporations. If AI was asked to create an image with the prompt “jumping on the bandwagon” it would produce a self-portrait.

And its getting pretty crowded on that bandwagon.

Tech industry leaders such as Nvidia, C3.ai and Meta are major players on the equities side, as well as the hardware and software sides. A growing number of investors large and small heeded the siren’s song of AI with dreams of an early Christmas for their portfolios.

Those profit expectations will exert a not insignificant influence on the continuing development and implementation of AI across industry sectors and throughout society.  That means artificial intelligence is going to start popping up in some unusual places, like the ballot box.

While no one – so far – has unveiled an AI-powered voting system for reasons obvious and a little frightening, voters in Cheyenne, Wyoming, could be among the first to cast a ballot for an AI candidate.

The “Virtual Integrated Citizens” or VIC is the creation of Victor Miller, a local resident, and while Miller’s name will be listed on the ballot, according to a story in Cowboy News Daily, Miller said if VIC is elected the chatbot will do all of the voting.

While an amusing story, the emergence of an AI political candidate makes it clear that applications of artificial intelligence are only limited by imagination and technical ability.

The more pressing issue is the potential impact of all those chips riding on AI, and the likelihood of an asset bubble that could rival the dot.com boom and bust of the late 1990s. Given the history of speculative mania in western society stretching back to the South Sea Bubble of the early 18th century through at least 48 assorted financial crises, panics and recessions just in the United States, the rush to invest in AI has the potential to become another period of “irrational exuberance,” in the words of former Federal Reserve Board Chairman Alan Greenspan.

And that exuberance today is fueled by expectations of big dividends and large profits tomorrow. As is the case with most new technologies, the financial benefits lag the investment risks, and today’s investors may not have the patience of previous generations. In today’s “what have you done for me lately” world

, restless speculators could decide to cut their losses, hanging a financial albatross around the economy’s neck. That wouldn’t be good for anyone – even VIC in Wyoming.