Almost All A.I. Investments are Going to Zero

Seemingly every investor I talk to these days is struggling with the same basic thing: they believe AI is going to be one of the most transformative technologies of the past several decades – and perhaps ever – but they have almost no idea how to invest in the space. And yet they are investing in the space. At a pace that puts the crypto boom to shame. Because, well, that's the job.

Of course that's not really the job. The job is to make a return on the capital for your LPs (or yourselves). Yes, it's of course to help entrepreneurs do their jobs as well. But that's mainly so you can do your job. Return capital. And that's looking like an awfully perilous position in AI at the moment. And it's going to get worse before it gets better. If it ever gets better. Because almost all of these investments in AI are going to zero.

That's not a comment on the state of the technology or its future potential, or some sort of condemnation of the entrepreneurs working in this space. It's just the unfortunate reality of our current situation.

There are a few issues at play...