I literally laughed out loud when reading about AI startup Thinking Machines’ early-stage funding ($2 billion) and valuation ($12 billion) last week.
The deal is the clearest sign yet that the current AI bubble is on the verge of bursting.
Thinking Machines has no product and no revenue. What it does have is 45 overpaid hires swimming in a Silicon Valley pool of self-adulation, buoyed by investor FOMO.
Even its name – which it stole from the eponymous failed 80’s supercomputer company – smacks of “smartest guys in the room” hubris.
What makes Thinking Machines truly egregious is that it has no competitive moat (having an ego the size of God’s arse and a higher valuation than 80% of the established companies on the Fortune 500 is not the same thing).
The PR fluff surrounding its funding talks about “human-AI collaboration” – essentially channelling a bunch of Second Life-level blah blah blah.
In reality (uncharted territory for Big Tech), AI’s true power lies in transforming the world economy by enabling the digitalization of industry and heavy industry, everywhere. That’s the $45 trillion market being addressed by incumbent vendors like Huawei, Ericsson and Nokia, as well as dozens of startups.
Unfortunately, it’s also a blue-collar n’ concrete floors world where Silicon Valley elites have never worked, and which they don’t understand. While Thinking Machines’ investors get their thrills from personalized consciousness augmentation through real-time neural data integration, the real opportunity lies in heavy metal — enabling a Liebherr LTM 11200-9.1 Mobile Crane to move 40-foot equivalent unit shipping containers without the assistance of a human longshoreman.
The last time we saw this level of illogical exuberance was in the early 2000s, with the optical networking bubble (anyone remember the Corvis clown car?), and we know how that ended.
I’ve never been more certain that history is about to repeat itself.
Brace for impact.
P.S. Here’s a handy visual guide to the difference between AI reality and Silicon Valley delusion today.
