September 14, 2024 – Amidst a growing skepticism among investors regarding the future of AI, Bank of America has released a report suggesting that the current AI boom is still in its nascent stages, mirroring the trajectory of the internet in the 1990s.
The bank’s statement comes at a time when substantial funds have flooded into the AI sector, with investors eagerly anticipating the promised enhancements in efficiency and productivity through AI implementations. However, doubts have emerged, with some questioning the revenue potential of generative AI to justify the current investments in AI infrastructure.
The report, which surveyed over 3,000 equity analysts and macro strategists across various companies, emphasizes that the initial consumer use cases of the internet were not as significant as the thousands of use cases and companies it eventually spawned. Similarly, AI is viewed as the third major technology cycle in the past 50 years, following the personal computer revolution in 1981 and the internet boom in 1994.
Notably, AI’s impact is expected to manifest more rapidly than previous technological waves, which took 15 to 30 years to gain mainstream acceptance. According to the report, generative AI could trigger a technological evolution, disrupting various industries and transforming the global economy within the next 5 to 10 years.
While investors tend to underestimate the long-term impact and overestimate the short-term potential of emerging technologies during a technology boom, the report highlights that AI capital expenditures could surpass $1 trillion in the coming years. Currently, AI’s development is comparable to the internet’s stage in 1996.
Furthermore, investments in companies like OpenAI, Anthropic, and Inflection AI are merely prerequisites for developing generative AI applications, most of which are still in the testing phase and require more time to mature and scale.
