Has the AI bubble burst? Wall Street wonders if artificial intelligence will ever make money моккано суши

There’s been one big question on the minds of Wall Streeters this tech earnings season: When will anyone start making actual money from artificial intelligence?

In the 18 months since ChatGPT kicked off an AI arms race, tech giants have promised that the technology is poised to revolutionize every industry and used it as justification for spending tens of billions of dollars on data centers and semiconductors needed to run large AI models. Compared to that vision, the products they’ve rolled out so far feel somewhat trivial — chatbots with no clear path to monetization, cost saving measures like AI coding and customer service, and AI-enabled search that sometimes makes things up.

But Big Tech still has relatively little to show for all their billions spent in terms of significant revenue gains from AI or profitable new products, and investors are starting to get antsy.

Amazon’s (AMZN) less-than-impressive earnings and outlook Thursday could be mostly chalked up to concerns that it is spending a ton on AI without much to show for it, at a time when its core business also faces hurdles. That dragged the stock down nearly 9% Friday. Intel’s (INTC) stock plunged 25% on Friday after the company said Thursday night that after big spending to adapt to the AI wave, it’s now trying to rein things in by cutting $10 billion in costs and laying off tens of thousands of workers.

In short, investors’ fears can be boiled down to: is all of this actually worth anything? Or is it just another shiny object the industry is chasing to bring back its dreams of endless growth, before it abandons it and moves onto the next big thing?

As Morgan Stanley analyst Keith Weiss put it on Microsoft’s earnings call: “Right now, there’s an industry debate raging around the (capital expenditure) requirements around generative AI and whether the monetization is actually going to match with that.”

UBS analyst Steven Ju asked Google CEO Sundar Pichai how long it would take for AI to “help revenue generation … (and) create greater value over time, versus just cutting costs?”