First it was the release of GPT-5 that OpenAI “
totally screwed up,” according to Sam Altman. Then Altman followed that up by
saying the B-word at a dinner with reporters. “When bubbles happen, smart people get overexcited about a kernel of truth,”
The Verge reported on comments by the OpenAI CEO. Then it was the sweeping MIT survey that put a number on what so many people seem to be feeling: a
whopping 95% of generative AI pilots at companies are failing.
A tech sell-off ensued, as rattled investors sent the value of the S&P 500 down by
$1 trillion. Given the increasing dominance of that index by tech stocks that have largely transformed into AI stocks, it was a sign of nerves that the AI boom was turning into
dotcom bubble 2.0. To be sure, fears about the AI trade aren’t the only factor moving markets, as evidenced by
the S&P 500 snapping a five-day losing streak on Friday after Jerome Powell’s quasi-dovish comments at Jackson Hole, Wyoming, as even the hint of openness from the Fed chair toward a September rate cut set markets on a tear.
Gary Marcus has been warning of the limits of large language models (LLMs) since 2019 and warning of a potential bubble and problematic economics since 2023. His words carry a particularly distinctive weight. The cognitive scientist turned longtime AI researcher has been active in the machine learning space since 2015, when he founded Geometric Intelligence. That company was acquired by Uber in 2016, and Marcus left shortly afterward, working at other AI startups while offering vocal criticism of what he sees as dead-ends in the AI space.