The problem with bailing out these companies is that it just kicks the can down the road. When GM and Chrysler got bailed out in 08, GM returned to profitability in 2010 and Chrysler returned to profitability in 2011.
The difference here is these AI companies have never been profitable and there is no telling if a bailout will even get them to profitability, it just gives them another few years until they need another cash infusion.
Currently my prediction is that OpenAI's IPO will likely blow up in much the same way that WeWork's IPO blew up and that will likely be the start of the great AI bubble burst.
Google has long been profitable, and Gemini is legit. Perhaps they're not included in the assertion as their computational clusters are monetized in other services as well?
In my comment I was really just referring to OpenAI, Anthropic and other companies where AI is the primary business. Google is a bit different cause they have a massive profitable business outside of AI.
Sure, a Nest thermostat doesn't allow you to converse with a large language model but it's still advertised as with AI.
I think the difference is really Google had an existing business that they can augment with new technologies while a lot of these other companies are a solution in search of a product.
I'm responding to the assertion that Gemini is legit. Being useful and being so indispensable that people are willing to spend 10-20% of their income on it (directly or indirectly) are entirely different things, and stock market valuations & investment levels roughly assume the latter will occur.
Chrysler didn't really recover. It made it out alive but soon chose to be eaten by Stellantis. They now are in crisis again, but under different ownership structure so another bailing is highly unlikely. They are at best 50% American (financially) with only one vehicle in production (big minivan and medium minivan, both terrible).
GM made it, but quite a bit of their family didn't.
I would be happy to see the Microsofts being forced to choose between axing something like Xbox and Office to survive the 2030s due to AI becoming a brown turd investment. That would be wild.
The difference here is these AI companies have never been profitable and there is no telling if a bailout will even get them to profitability, it just gives them another few years until they need another cash infusion.
Currently my prediction is that OpenAI's IPO will likely blow up in much the same way that WeWork's IPO blew up and that will likely be the start of the great AI bubble burst.