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AI and EVs Are Doing The Same Thing

Austin Smith

Published: July 29, 2024 12:53 pm

AI and EVs Are Looking Eerily Similar

Doug McIntyre and Lee Jackson discuss the similarities between the current hype around AI and the past excitement for EVs, drawing parallels to the dot-com bubble. They note that initial projections for EV sales and investments have not met expectations, much like the current speculative enthusiasm for AI. Both sectors, despite their promising futures, seem to be overextended. They highlight the pattern of new technologies being hyped beyond their immediate capabilities and agree to revisit Microsoft’s (NASDAQ: MSFT) earnings to see how their AI investments are translating into actual performance.

But Sometimes Hype Turns To Millions

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Transcript:

Well, it reminds me in some ways of EVs.

In other words, if you looked at the original assumptions about EV sales in the United States and worldwide, EV sales were going to be half of all car sales six years from now in the original forecasts.

Ford was going to spend $30 billion, which they probably have already done on EVs.

And as you know, Tesla’s valuation was almost a trillion dollars.

EV sales have slowed down.

You’re saying AI has a very bright future.

EVs have a bright future.

But I think that if you said, what are the two sectors in the last three years that have gotten way out over their skis?

I say EVs and AI.

Yeah, I agree.

And the thing is, we’ve seen this before.

I mean, I was around through all of the dot com.

So was I.

I was right in the thick of it.

And you know, literally every product had so-and-so, it was so-and-so.com, pets.com, this.com.

And like every deal I see coming out or every deal that’s in the tunnel for private equity to IPO land is something AI, something AI, something AI.

And how many times is it mentioned during earnings?

And so clearly it’s a bubble.

And again, there’ll be survivors just like there was out of the dot com era.

I mean, Amazon was $4 for years, you know, but it’s, it’s, you’re right.

Well, let’s do it in the herd.

Yeah.

Microsoft’s earnings will clearly include a full quarter when they were sort of knee deep if not net deep in AI.

Yeah.

So once you and I get together a day or two after Microsoft’s earnings come out and let’s talk about it.

I think that’s a good idea.