Is AI going to end the world, save the world or just cost you a lot of money?
The last one seems the most certain.
There is every reason to wish luck to ElevenLabs, which we report today is valued at $100 million despite having little in the way of staff or even revenues.
It might make it. But most new AI businesses won’t.
Investor beware — some people have seen this before. When the first internet boom began in the late 1990s, early adopters said it would wipe out most existing businesses. Shares in companies that weren’t considered sufficiently up on the new game got trashed.
Some got around this by sticking .com at the end of their name and launching a website. They dotcommed — dotconned? — their way out of it.
That will happen soon with AI. Every business will claim to be an early adopter.
And most of them won’t be anything of the sort.
As for the values now attaching to AI firms, well, some of them will grow into those values, come to earn them. And many others will turn out to be fantasy valuations.
The firms will disappear or be bought up by bigger rivals, or already established businesses. There is always a rush when any new technology starts raising cash.
Here is how Warren Buffett describes that process: “First come the innovators, who see opportunities that others don’t. Then come the imitators, who copy what the innovators have done.
“And then come the idiots, whose avarice undoes the very innovations they are trying to use to get rich.”
