An AI bubble can train in the United States, according to the president of the Alibaba group Joe Tsai.
Speaking on Tuesday at the HSBC Global Investment Summit in Hong Kong, Tsai declared that he was “amazed” by the investment figures of the AI data center which he saw in the United States, citing the $ 500 billion that Optai, Softbank and Oracle will say that they will spend on the Stargate project announced in January.
“I do not think it is entirely necessary,” said the co-founder of the Chinese technological conglomerate. “I think that in a way that people invest before the demand they see today … Is it correct or incorrect?” You can pass a judgment. “
But Tsai’s real red flag is the phenomenon of data centers developers creating new “SPECs” projects, without liaison of large AI companies like Microsoft or Google or Alibaba itself.
“I’m starting to see the start of a kind of bubble,” said Tsai.
The Alibaba chair is of course not the first to suggest that a bubble is formed – the idea was commonplace in all the arms race of the AI which began during the publication of Openai at the end of 2022. But the predictions of bubbles are largely coming from those which criticize the absence of the industry for the benefit of linguistic models.
Tsai is optimistic about AI, because he has struggled to stress immediately after mentioning his fear of the “bubble”: “However, after having said, this does not take away our excitement with regard to AI and the future proliferation of AI and how AI can be applied in each promenade of life and each industry.”
Alibaba recently undertook to spend $ 53 billion on data centers and Cloud Computing, more than it was spent on AI infrastructure in the last decade.
The founder of Bridgewater Associates, Ray Dalio, also recently warned against a bubble in American actions of AI, comparing the current moment at the prospect of the Bust Dotcom at the turn of the century. “Where we are in the cycle right now is very similar to the place where we were between 1998 or 1999”, Dalio said to Financial time in January. “In other words, there is a new major technology that will certainly change the world and will succeed. But some people confuse this with the success of investments. ”
However, there may be another aspect in Tsai’s warning. Led by Deepseek, Chinese AI companies are currently on open-source and light models, in some cases, even small enough to operate on consumption equipment.
Alibaba’s AI team announced a “smarter and lighterThe version of its series of Qwen2.5-VL Open Source models, affirming significant improvements in fields such as mathematical reasoning and image understanding despite the fact that the version has only 32 billion parameters.
Advances like this – and the creation of low -cost Deepseek models – suggest that Stargate’s power at Stargate level can indeed be exaggerated (although some would say that the explosion of AI adoption could justify this level of investment.) So perhaps Tsai’s warning had a suspicion of engine.
This story was initially presented on Fortune.com
