Is the artificial intelligence bubble bursting?This question has been circulating as stock markets decline, resulting in significant losses for technology companies that experienced rapid growth with the emergence of large language models. Economist Hyman Minsky cautioned against excessive risk-taking and the seduction of investors for misguided reasons, leading to destructive cycles of economic boom and bust. Minsky's model begins with a phase called "displacement, " where investors become enthralled by something they don't fully comprehend - such as AI. Last year, OpenAI's ChatGPT chatbot amassed 100 million users in just two months. Following displacement, Minsky's model predicts a boom, euphoria, profit-taking, and ultimately panic. The boom is evident, with over 200 AI startups globally achieving unicorn status, valued at $1 billion or more. Euphoria has also been pervasive. Earlier this year, the Wall Street Journal reported that OpenAI's CEO, Sam Altman, was in discussions with investors to raise a staggering $5 trillion to $7 trillion to revolutionize the chip industry and ensure an adequate supply of computing power. This assumption suggests that augmenting computing capacity and making data readily available will bring us closer to achieving lifelike sentience. However, there may be overly optimistic expectations that make this bet uncertain. We may currently be witnessing the profit-taking phase, akin to the precarious moment when Wile E.

Coyote realizes he has run off a cliff and is standing on thin air before plunging downward. Similarly, investors in the market suddenly recognize that prices cannot indefinitely rise, prompting them to withdraw their investments, causing share prices to plummet. This trend is particularly impacting semiconductor stocks, especially Nvidia, the sole company capable of manufacturing graphics processing unit chips that power AI. Whether we have reached the stage of Minskyian panic remains debatable. Bubbles burst as quickly as investors flee the market. Amazon's stock price decline was partly attributed to analysts' observations of lavish AI spending with little tangible results. While some venture capitalists believe the AI party is yet to start, the general public has not found many practical applications for the technology. A Reuters Institute poll revealed that although 29% of people in the UK claimed to have used ChatGPT, only 2% reported using it on a daily basis. Most users who tried the chatbot did not perceive its usefulness, as emphasized by analyst Benedict Evans.