"In the Background": Amazon and Google Subtly Adjust Expectations for Generative AI Amid Declining Hype Cycle

Nvidia's shares have risen by a whopping 80% this year, contributing to a big surge in artificial intelligence. This has got experienced traders wondering: When will this growth slow down?

Well, it seems things aren't stopping abruptly, but they're definitely starting to calm down. Here's a story from The Information:

Over the past year, big tech companies have been very excited about generative artificial intelligence, calling it the next big thing. This excitement has driven the stock market to new highs. But behind the scenes, people who sell this technology are telling their sales teams to be cautious. They're saying that the hype around this technology is too much compared to what it can actually do for customers without costing too much.

Some bosses at major cloud companies like Microsoft, Amazon Web Services, and Google have privately said that most customers are being careful or "thinking hard" before spending more on new AI services. They're worried because it's expensive to run this software, it's not always accurate, and it's hard to know if it will really add value.

If The Information is right about this, it's more proof that the AI hype bubble is losing steam.

Last month, a person from Deutsche Bank said in a message to their customers that talk about artificial intelligence in the business world reached its highest point in the third quarter.

The latest info from Bloomberg's earnings calls shows that people are talking less and less about "generative AI" each quarter. And even the number of news stories talking about "chatbots" peaked over a year ago.

But interestingly, as Nvidia's stock keeps climbing, more and more people in the news are mentioning the "AI bubble."

And just recently, someone from Rabobank, a big bank, wrote a note saying that stock prices seem to have reached a point where they won't go up much more, kind of like what happened with tech stocks in the dot-com era.

So, what could bring this AI excitement to a halt?

According to a person from Bank of America, changes in interest rates, how many people are using AI, and new rules and regulations could all play a part.