Experts warn AI hype rises as technology transforms life

Warnings are mounting over the U.S. stock market rally led by artificial intelligence technology stocks. The Bank of England and IMF Managing Director Kristalina Georgieva have said the surge in AI shares recalls the dot-com bubble driven by IT companies. Even OpenAI founder Sam Altman has cautioned that much of the current AI boom is a bubble.

The numbers underline the concern. The Buffett Indicator, which Warren Buffett has called the “single best measure of valuation,” surpassed 200 percent last month. The indicator, calculated by dividing a country’s total stock market capitalization by its gross domestic product, is well above the dot-com era peak of about 140 percent.

Despite warnings, AI is driving tangible changes in everyday life. A communications office at a South Korean SK Group affiliate recently used an AI video generator to produce an internal promotional video. A project that once cost millions of won was replaced with a subscription service costing 200,000 won per month. AI automatically created the characters, script, and ad-libs, delivering a polished final product while cutting costs and production time.

AI’s impact goes beyond industry. Once considered purely technical, AI now extends into hobbies and emotions. A business professor in 50s recently started composing music with an AI generator. The professor turned melodies that existed only in his mind into songs with AI-generated vocals and shares them with friends. An office worker in 30s said he uses ChatGPT to discuss personal relationship issues and find comfort. Like the lonely character in the film, people today have already begun sharing emotions with artificial intelligence.

Is the AI boom a bubble poised to burst, or a signal of a new era? While the future is uncertain, history offers guidance. During the dot-com bubble, most companies failed, but Amazon, Google, and Microsoft survived by focusing on real market problems instead of chasing flashy technology or investor hype. They built services that users returned to daily, generating self-reinforcing network effects. South Korean companies that survived the IT bubble followed the same strategy. The AI industry faces a similar test, with success favoring companies that address everyday problems rather than merely develop technology.

Jeff Bezos, Amazon’s founder, said AI may be a bubble, but the technology is real. The bubble may fade, but the technology will endure. Investors and businesses must balance caution with recognition of AI’s potential, avoiding both excessive optimism and extreme pessimism to thrive in the AI era.