OpenAI Chairman Bret Taylor believes the AI sector may be in a bubble similar to the dot-com era, but that's not deterring him from OpenAI or his other AI startup.
What Happened: As AI use cases grow, valuations in the sector have surged. OpenAI is now one of the world's most valuable private companies. In a recent interview with The Verge, Taylor expressed caution about the sector’s rising valuations.
The Verge also asked Taylor about OpenAI CEO Sam Altman, who said that we're currently in an AI bubble. Taylor agreed.
"I think there's a lot of parallels to the internet bubble," Taylor, the former CTO of Meta Platforms, said.
Dot-com companies like Pets.com and Webvan were flops and still got attention. But some companies made it out of the bubble, Taylor explained. That includes “two of the largest companies in the world” — Amazon and Google.
The OpenAI chairman noted that examining the growth of GDP reveals how much has been created by the "existence of the internet."
"One could argue that all the people in 1999 were kind of right. It was as impactful on pretty much every measure."
Taylor gave props to Webvan that may have been early and help pave the way for the success of companies like Instacart and DoorDash today.
Taylor said if you were an Amazon.com Inc (NASDAQ:AMZN) shareholder during the dot-com bubble, you're still looking good today.
When it comes to the AI sector today and the bubble, Taylor said, "there's going to be huge winners."
"Some companies will fail and some will succeed."
Taylor said AI can transform the economy and create value for the future, but some companies and investors will lose money.
Read Also: OpenAI Chairman Says Only Tech Giants Can Afford New AI Models—Startups Should Focus On Applications
Why Taylor Isn't Worried
An AI bubble would be bad news for Taylor, who is also the CEO and founder of Sierra, an AI agent company. And yet, Taylor isn't worried about an AI bubble. Instead, he argues against the notion that companies aren’t seeing results from AI spending.
"We're just in a really new world because we're taking something scarce and making it plentiful," Taylor said.
When it comes to Sierra, Taylor said the company isn’t selling AI. Rather, it’s “selling customer experience” and has a near 100% success rate with customers doing proof of concept studies before going live.
As Taylor sees it, we're in "the early days of AI." Companies are using the tech to either solve problems or build AI solutions themselves, he explains.
For example, Sierra is partnering with retailers so consumers can submit a photo of damaged goods as a warranty claim. The new product is then shipped out, all done without a human involved.
"These agents are remarkable at what they're doing,” Taylor adds.
Sierra has hundreds of customers, with more than 50% of the company's customers having annual revenue of more than $1 billion and 20% of the company's customers having yearly revenue of more than $10 billion.
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