The surge of money into artificial intelligence is a sign of activity, not a warning sign of collapse, according to Groq CEO Jonathan Ross.
Bubble Or Boom
Ross told CNBC last month that rising investment reflects competition among companies racing to build better AI systems. When asked whether a bubble was forming, he pushed back and said he saw strong returns for real breakthroughs in the field.
"There's subtlety and nuance here," he said. "You do want a bubble because the bubble is the sign that there's a lot of economic activity going on, and you just attract all sorts of people." He said engineers, researchers and investors all take bigger swings during periods of excitement.
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He argued that the attention helps push progress faster. According to Ross, the debate should not center on whether AI is in a bubble, but whether money is flowing toward the best ideas.
"When you focus on the real AI innovations, you can't put enough money into that, and there will be great returns," he said. However, he also acknowledged mistakes happen, adding there will be investments "that don't return."
Money Will Come Back
Ross said the key question is whether the money flowing into AI will generate long-term gains. "Is the amount of money that's paid into this AI boom going to be returned with interest? I think the answer to that is, yes," he told CNBC, adding that the strongest returns will come from "real AI innovations."
Ross founded Groq in 2016 after working as an engineer at Google, where he helped design the company's Tensor Processing Unit chips, which are built for machine-learning workloads.
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As investors continue to hunt for computing power, demand for processors has grown. Microsoft Corp. (NASDAQ:MSFT) said capital expenditures reached $34.9 billion, driven by demand for cloud and AI offerings, according to its most recent quarterly results.
Meanwhile, chipmakers and cloud providers have announced new spending on infrastructure as companies train and deploy larger and more complex models.
Others See Risks
The enthusiasm has also led to warnings from major tech voices. Former Intel Corp. (NASDAQ:INTC) CEO Pat Gelsinger told CNBC last month that there is "of course" an AI bubble, even though he does not expect it to burst immediately.
Meanwhile, Nick Clegg, former president of global affairs at Meta Platforms Inc. (NASDAQ:META), told CNBC that the AI boom has created "unbelievable, crazy valuations" and said the likelihood of a market correction is "pretty high."
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