Palantir CEO Alex Karp Dismisses AI Bubble Concerns, Says 'A Lot Of AI Just Doesn't Work'

Alex Karp, CEO of Palantir Technologies Inc. (NYSE:PLTR), rejected the idea that the artificial intelligence (AI) industry is in a bubble, attributing the skepticism to the failure of numerous AI projects.

Palantir CEO Dismisses AI Bubble Concerns

Karp, speaking to Laurence D. Fink at the World Economic Forum on Tuesday, dismissed concerns that the AI industry is in a bubble, saying the skepticism stems from the fact that “a lot of AI just doesn’t work.”

He further explained that the failure of many AI initiatives has led to the perception of an AI bubble.

"People have tried things that just can never work. You buy a LLM, put it on your stack, and wonder why it's not working," Karp noted.

AI Adoption Outpacing Industry Capacity

The American businessman also emphasized that the industry is still in its early stages, noting that the real challenge is figuring out how to make AI work for different countries and companies.

Karp mentioned that the adoption of AI is accelerating beyond the industry’s capacity, and simply purchasing large language models off the shelf won’t suffice. He added that companies need to build a software layer to manage these models in a way that their organization can understand and use to generate value.

"Once you build a software layer to orchestrate and manage the LLMs in a language your enterprise understands, you actually can create value."

Diverging Views On AI's Bubble Risk

The AI industry has been a topic of intense discussion, with some experts warning of a potential bubble. 

Vinod Khosla, a prominent venture capitalist, argued that actual AI usage, rather than volatile stock prices, should determine whether the industry is in a bubble. In contrast, billionaire hedge fund manager Ray Dalio compared the current excitement around AI to the early stages of a bubble, noting similarities to extreme periods in market history.

Meanwhile, Michael Burry, the investor famous for predicting the 2008 housing market crash, warned that the AI sector is in a “mania” that is destined to fail, despite massive capital expenditures by the world’s wealthiest corporations.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.