AI is booming. Or boom?

AI is booming. Or boom?

Investors must understand that correctly predicting artificial intelligence (AI) technology will change the course of humanity, even for the better, which does not automatically translate into desirable investment returns.

General Purpose Technologies (GPT) of the past, such as the automobile, electricity, commercial aviation, steam locomotives and television, have all changed the course of human history, and yet more than a thousand automobile manufacturers have disappeared from the United States and today there is none that is profitable and that has not been bailed out by government or private capital.

The hype surrounding a new technology generally drives down investment costs for participants, and they naturally take advantage of the cheap capital to expand and scale that technology in a rapid land grab. But overcapacity usually occurs and the results are disappointing. There are disappointing returns because while…