--- title: "Economist Says AI Is a Doomed Bubble" description: "The chatbot wars — led by ChatGPT creator OpenAI, Bing/Sydney overlord Microsoft, and the very desperate-to-catch-up Google — are on, with Silicon Valley behemoths and the industry's biggest investors rushing to throw major dollars behind the easily anthropomorphized language-generating systems. But according to a pair of experts who published a scathing essay in Salon, the […]" date: "2023-02-23" modified: "2023-02-23" authors: - name: "Maggie Harrison Dupré" job_title: "Senior Staff Writer" link: "https://futurism.com/authors/mharrison" url: "https://futurism.com/economist-ai-doomed-bubble" categories: - "Artificial Intelligence" tags: - "ai" - "ai chatbot" - "chatbots" - "economics" --- # Economist Says AI Is a Doomed Bubble ![But according to a pair of experts, the frothy hype cycle surrounding chatbot AI systems is doomed to be what investors fear most: a bubble.]() *\Image: Getty / Futurism\* The chatbot wars — led by ChatGPT creator OpenAI, [Bing/Sydney overlord Microsoft](), and the very desperate-to-catch-up Google — are on, with Silicon Valley behemoths and the industry's biggest investors rushing to throw major dollars behind language-generating systems. But according to a pair of experts in a [scathing essay in *Salon*](), the frothy hype cycle surrounding chatbot AIs is doomed to be what investors fear most: a bubble. When popped, they argue, it'll reveal Large Language Model (LLM) -powered systems to be much less paradigm-shifting technologies, and really just a whole lot of [smoke and mirrors](). "The undeniable magic of the human-like conversations generated by GPT," write Gary N. Smith, the Fletcher Jones Professor of Economics at Pomona College, and Jeffrey Lee Funk, an independent technology consultant, "will undoubtedly enrich many who peddle the false narrative that computers are now smarter than us and can be trusted to make decisions for us." "The AI bubble," they continue, "is inflating rapidly." The experts' essay is rooted in the argument that a lot of investors simply just seem to fundamentally misunderstand the underlying technology behind the easily anthropomorphized language models. While the bots, particularly ChatGPT and the OpenAI-powered Bing Search, do *sound* impressively human, they're not actually synthesizing information, and thus fail to provide thoughtful, analytical, or usually even correct answers in return. Instead, like the predictive text feature on smartphones or in email programs, they just predict what words *might* come next in a sentence. Every prompt response is a probability equation, as opposed to a demonstration of any real understanding of the material at hand, a reality of the underlying machinery that leads to the phenomenon of AI hallucination — a very serious failure of the tech made even more complicated by the machines' proclivity for sounding wildly confident, sometimes to the point of becoming combative, even when delivering incorrect answers. "Trained on unimaginable amounts of text, they string together words in coherent sentences based on statistical probability of words following other words," Smith and Funk explain. "But they are not 'intelligent' in any real way — they are just automated calculators that spit out words." Many AI optimists, on the other hand, have written off the burgeoning tech's sometimes funny, sometimes genuinely horrifying quips and errors as growing pains. They often argue that more data, which includes the free data granted to the machines by way of [public use](), will be the solution to the chatbots' fact-checking woes. If that's the case, such would be a surface-level patch, rather than a fundamental flaw in the machinery. It's also a tempting narrative for AI investors, who would rather have bought a car with a flat tire than a car that simply can't function as promised at all. But according to Smith and Funk, more data could actually make the programs' very clear problems worse. "Training it on larger databases will not solve the inherent problem: LLMs are unreliable because they *do not know what words mean*. Period," the experts argue. "In fact,"' they add, "training on future databases that increasingly include the BS spouted by LLMs will make them even less trustworthy." In other words: if, as many [other experts fear](), incorrect or otherwise misleading or harmful chatbot-made content — which is currently pretty cheap and easy to make — starts to clog up the internet, robots like ChatGPT and Bing Search will have an increasingly difficult time sorting through what's real and what isn't. Trustworthy information will be fewer and further between than ever, and in a way, the internet will become an imitation of itself. It's a pessimistic take, sure, and maybe the AI optimists are right. Regardless, though, a lot of powerful people out there have and are continuing to pour big bucks into LLMs, not to mention a string of other generative AI technologies. For their own sake, they have a [vested interest]() in making sure these AI products get into consumers' hands — nevermind whether the products are actually all that game-changing in the long run. "That astonishing and sudden dip," write Smith and Funk, speaking to Google's massive loss in wealth following their [embarrassing AI advertising ordeal](), "speaks to the degree to which AI has become the latest obsession for investors." "Yet their confidence in AI — indeed, their very understanding of and definition of it," they add, "is misplaced." **READ MORE:** [*AI chatbots are having their "tulip mania" moment*]() \[*Salon*\] **More on chatbots:** [*OpenAI CEO Says AI Will Give Medical Advice to People Too Poor to Afford Doctors*]() ## Author At Futurism, I've reported extensively on the rise of AI as a cultural and business force shaping the media industry, and more broadly how those dynamics are changing how we all consume and share information and relate to one another. I'm also fascinated by public health policy and ethics, the role of emerging tech in politics and governance — and the powerful people and forces at those intersections — climate change, and the environment. My investigation on Sports Illustrated's use of AI-generated authors with fictional biographies won a 2024 Mirror Award for "Best Story on Media Coverage of Artificial Intelligence in Journalism and the Media" from Syracuse University's SI Newhouse School, I contributed to Niemen Lab's 2025 Predictions for Journalism series, and I've discussed my work for Futurism during appearances on NPR, CNN, the BBC, the CBC, and more. I grew up in rural Pennsylvania and attended the University of Massachusetts Amherst, where I played Division I field hockey for the Minutewomen as a midfielder. Since then, I've lived in New Orleans, Louisiana and Manhattan, New York. I spend my free time running, reading, perusing archival fashion, and searching for the world’s best negroni. I also have a debonair tuxedo cat, Westley, who's named after "The Princess Bride." ### Author social links [Bluesky]()