From Investing.com: 2024-07-07 03:01:02

Yardeni Research raises concerns about the AI technology rally, warning of potential risks that could hamper its growth. A flood of $330 billion into 26,000 AI startups in the past three years has created a crowded market, with many companies struggling financially. Despite claims of AI’s superiority, analysts advise caution due to industry volatility.

The unprecedented flow of funds into AI startups has sparked worries of “AI Inflation,” with many companies facing financial difficulties. This influx of capital has fueled innovation but has also led to a crowded market where profitability is a challenge. Yardeni Research highlights concerns about startups running out of cash, impacting AI-related revenues.

AI industry leaders’ claims suggest a potential bubble in the sector, with Nvidia’s CEO touting their Blackwell architecture as groundbreaking. However, analysts caution that industry volatility may persist, impacting AI’s efficiency gains. Yardeni Research acknowledges AI’s potential but urges investors to remain cautious amid the current tech rally.

In summary, Yardeni Research urges investors to approach the AI tech rally with caution, citing risks of excessive capital influx and overhyped expectations. While AI holds significant promise, challenges such as financial difficulties and industry volatility underscore the need for careful consideration in investment decisions.



Read more at Investing.com: Two risks to the AI tech rally By Investing.com