The AI hype bubble is getting out of control: Morning Brief
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Greetings from the French Riviera, investors.
Yours truly and Brad Smith are live all week for Yahoo Finance Live from Cannes Lions, the de-facto Super Bowl of the ad industry. In attendance is everyone from Twitter's new CEO Linda Yaccarino (and reportedly her new billionaire boss, Elon Musk) to Snapchat CEO Evan Spiegel to Spotify founder Daniel Ek. And of course, Yahoo CEO Jim Lanzone is in the house crushing it.
We have some potentially stock-price-moving interviews kicking off this morning, so I encourage you to tune in and follow the Yahoo Finance Twitter feed.
With that promo out of the way, I'm here to tell you that after 48 hours on the ground in the Continent, I can definitively say that the AI hype bubble has traveled across the pond.
"Isn't this supposed to be an ad industry event, not Techcrunch Disrupt 2023," has been one of my main thoughts up to now.
Buff glistening people — presumably part of the conference in some sort of capacity — are running on along the picturesque beach with AI mentions on t-shirts.
Snapchat is out hyping its various AI and VR efforts in a full-building takeover in front of the beach (so much for the struggling social media platform watching its cost structure).
Meta has one of the larger presences (again, so much for Zuck's "Year of Efficiency") at the event from what I can tell — Amazon is probably the largest — and continues to promote new WhatsApp features and what it's doing in AI.
Pinterest will no doubt discuss its AI efforts (more on those here from a recent chat I had with new CEO Bill Ready who is also in attendance) at its beach house just a few rows down from Yahoo and Google's YouTube.
AI is a topic of interest at most panel discussions, with a keen focus on how the technology will shape the advertising industry.
It's AI mania at yet another event for me this year — I can't outrun the stuff!
And you, the investor, can't outrun it either.
Mere mentions of new AI tools from various tech companies continue to prop up stock prices — and the broader S&P 500. Food companies are playing up the potential of AI on earnings calls. Food companies!
Companies are taking great pains have their marketing and investor relations departments pump up AI in external forums.
This is all getting crazy.
I am not saying generative AI is internet bubble type of stuff — it has true game-changing promise for companies and by extension their profits. But how freely AI is being talked about is becoming a red flag for me from an investment standpoint. When everyone is doing something in investing, it's often wise to question it and consider doing the opposite.
My advice: check your valuations on any company discussing AI, make sure said company is profitable and generating cash and question if what they are working on with respect to AI is truly fresh.
Two great examples of fresh AI projects besides Microsoft and Google are AMD and Salesforce, in my view.
As for me, it's back to the French Riviera...and the AI hype bubble.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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