The rapid growth of AI has led companies to spend billions of dollars on new data centers, chips and software. However, questions are now being raised about whether these huge investments will generate enough returns. OpenAI CEO Sam Altman has acknowledged that these concerns are justified. During an interview with CNBC, Altman said that doubts about AI spending are one of the most reasonable criticisms of the industry right now.
“So I think this is the most fair criticism right now of AI,” Altman said. “You hear companies saying, I am spending a ton of money on AI. And I know some great stuff is happening, but I know there’s a ton of waste.”
Altman further revealed concerns he hears from businesses. “How long do I have to wait for it to really show up in revenue, and how long do I have to wait to really get the costs under control?” he said. “I assume that the industry will figure that out pretty quickly, but I think that is a fair, a fair issue.”
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His comments come at a time when investors are closely examining whether the AI boom can justify the big amounts of money being spent on it.
Recent data from cloud optimisation company Cast AI suggests that a large portion of AI computing resources may not be used efficiently, reports Business Insider. After studying 23,000 computing clusters across thousands of organisations, the company found that average GPU usage was only 5 per cent. This means that around 95 per cent of the available graphics-processing capacity remained unused.
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Many companies are reportedly stockpiling AI chips because they fear missing out on future demand, even when they do not currently need them. Meanwhile, AI researcher Gary Marcus also recently described the industry’s spending plans as the “Greatest capital misallocation in history,” arguing that major technology companies are investing massive sums without yet proving that the returns will match those investments.
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