Nvidia’s explosive growth masks AI disillusionment

DOES anyone in Silicon Valley know the saying, “The bigger they are, the harder they fall”? Perhaps it’s just a matter of time before they will.

Tech company leaders should be wincing at the rapid ascension of Nvidia Corp now that the artificial intelligence (AI) rally has propelled the chipmaker to become the world’s most valuable company. This is a firm that sells coveted AI chips to a handful of cloud giants who are reaping the short-term benefits of AI hype, even as things are looking murkier downstream.

It’s hard to see how Nvidia chief executive officer Jensen Huang will sustain such growth (even as he steers his company into selling software), and he can thank himself and his peers. Tech giants such as Alphabet, Amazon.com and Microsoft have warped expectations for generative AI’s contribution to profits. They will pay for that if they don’t temper expectations.