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Artificial intelligence will no doubt change much about our world in the long run. But for now, we may be living through an AI bubble.<\/p>\n
Those seeking evidence of this might cite news of Cognition Labs seeking a $2 billion valuation, as reported<\/a> by the Wall Street Journal<\/em> on Saturday.<\/p>\n Founded in November, Cognition Labs makes Devin, which it describes as<\/a> the \u201cfirst fully autonomous AI software engineer.\u201d It\u2019s generated no real revenue. It launched<\/a> Devin this month.<\/p>\n Earlier this year, the startup raised $21 million in a deal valuing it at $350 million. It then turned down offers valuing it at $1 billion. Now, according to the Journal<\/em>, it\u2019s in talks with investors for a deal that would value it at up to $2 billion.\u00a0<\/p>\n That\u2019s a staggering figure for a new venture. But it\u2019s not all that shocking in today\u2019s AI space. Perplexity, an AI search startup challenging Google<\/a>, secured funding<\/a> a few weeks ago valuing it at $1 billion, up from $520 million a few months prior, with Amazon<\/a> founder Jeff Bezos among the backers<\/a>. Mistral, a French AI startup founded just over a year ago, hit a $2 billion valuation<\/a> in December.<\/p>\n Each of these startups might well justify their lofty valuations. But as more and more AI ventures snag improbably large sums from investors spreading their bets, the sense of a bubble increases among some observers.\u00a0<\/p>\n Albert Edwards, chief global strategist at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale, is among the skeptics.\u00a0<\/p>\n \u201cEvery bubble has a compelling narrative,\u201d he wrote in a note this week<\/a>. \u201cThe current narrative centers on the anticipation of an AI-driven surge in corporate profits to fully justify the current stratospheric valuations. Those of us who lived through the late 1990s [tech] bubble have heard it all before and roll our eyes skyward.\u201d<\/p>\n As for Devin, \u201ca lot of companies are working on some variation of this idea,\u201d venture capitalist David Sacks noted on a recent episode<\/a> of the All-In Podcast<\/em>. While he likes the venture\u2019s \u201cagent-first approach\u201d for generating new software projects, \u201cwhere I think this gets much trickier and is much more difficult is when you\u2019re working in existing code bases,\u201d a challenge other AI startups are addressing.<\/p>\n One advantage with Devin, he added, is that it\u2019s \u201cgonna demo really well.\u201d\u00a0<\/p>\n Whether cool demos that wow investors today translate into thriving companies years down the road, of course, remains to be seen. Either way, today\u2019s eye-popping valuations for unproven startups will likely be remembered.\u00a0<\/p>\n<\/div>\n\u2018Every bubble has a compelling narrative\u2019<\/h2>\n
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