Can AI live up to its own hype?

Unfortunately, these days I’m often reminded that I am no longer young.

For example, I still have vivid memories of sitting inside a cinema, oversized (and overpriced) popcorn and Coke in hand, watching the Stephen Spielberg blockbuster, Jurassic Park.

Today, I realised, the event that formed that memory took place 32 years ago this month.

Jurassic Park was a seminal moment in cinema, ushering the industry into the digital age. Suddenly, nothing was impossible. All you needed was a talented technician and enough computing power.

There was, however, a human cost to this new era.

In a textbook case of creative destruction, the freedom and potential of digital special effects made the maestros of analog special effects, some of which were behind some of the most iconic scenes in cinema history, of the time obsolete.

Hollywood transformed, but many were left behind.

Welcome to Robot Park

What set me on this walk down memory lane? Ironically, I was thinking about artificial intelligence.

This mega-trend has been the topic du jour in global financial markets for the last few years.

What Hollywood experienced when Jurassic Park was released, we are now experiencing with artificial intelligence (AI). Unlike how digital special effects disrupted movie production, however, artificial intelligence is not going to be limited to one single niche.

Perhaps Viktor Shvets, Head of Global Desk Strategy at Macquarie Capital, said it best at the recent Livewire Live 2025 event:

“It doesn’t alter one sector or two sectors - it alters almost everything".

Today, AI is being used to code programs, analyse data, diagnose patients, solve customer service queries and offer friendship to lonely teenagers amongst other things.

It is revolutionising the world, and saving businesses significant costs.

Unsurprisingly, businesses are investing heavily into artificial intelligence.

According to the 2025 AI Index Report produced by Stanford University, more than US$252 billion was invested commercially into artificial intelligence in 2024. According to estimates by UBS, this is likely to increase to US$375 billion in 2025, potentially rising to US$500 billion the year after.

Meta (NASDAQ:META), a leader in AI but better known as the company behind Facebook, is in the process of building enormous data centres to take advantage of this trend. According to founder, Mark Zuckerberg, just one of these buildings would “cover a significant part of the footprint of Manhattan”.

On stock markets across the world, investors have thrown money at any company that touts artificial intelligence as part of its future business strategy.

There is no question. The world of artificial intelligence is upon us and investors are excited about it.

Press enter for extinction

But has the hype gone too far? 

In the rush to see all the ways that AI can revolutionise business and improve profitability, are investors and business leaders ignoring the risks?

Ironically, this was also a key theme in Jurassic Park.

Perhaps Jeff Goldblum's character, Dr. Ian Malcolm, said it best:

"Your scientists were so preoccupied with whether or not they could, they didn't stop to think about if they should".

In our world, the scientists are the tech leaders like Mark Zuckerberg and Elon Musk.

So excited are they about the potential of the technology that both have made comments that frame the replacement of human jobs by AI as a positive. 

Not all tech leaders, however, are giddy at the prospect of replacing humans.

In an interview with American broadcaster CNN, Dario Amodei, chief executive of artificial intelligence company Anthropic, offered a stark warning that AI could "eliminate half of entry-level, white collar, jobs and spike unemployment to as much as 20% in the next one to five years.

Computer scientist, Geoffrey Hinton, who is known as the "Godfather of AI" is even more blunt telling the Financial Times:

"What’s actually going to happen is rich people are going to use AI to replace workers, it’s going to create massive unemployment and a huge rise in profits. It will make a few people much richer and most people poorer. That’s not AI’s fault, that is the capitalist system".

This is something that was echoed by Macquarie's Viktor Shvets telling the crowd at Livewire Live that "you want to become part of the 1% or you will be a peasant".

Such a world, where wealth inequality increases and job prospects disappear, is unlikely to be well received by society, no matter how much the likes of Zuckerberg and Musk look at it positively.

If this scenario plays out, it's easy to see a world dominated by civil unrest.

These are real problems, that need real solutions before we can really enter a world dominated by artificial intelligence, and they are no where near close to being understood let alone solved.

Life finds a way (but usually in a measured way)

With experts painting two very different pictures of the future of the world in an AI age, who's likely to be right?

I'd argue neither of them.

My view is to proceed with caution and accept that while AI will be a force of change, that it won't universally help all people or all businesses.

History is littered with examples of new inventions changing the world and they tend to follow a predictable journey.

First, we see a lot of hype leading to exaggerated expecations. When these expectations fail to eventuate, we see a swarm of disillusion and frustration. Finally, out of this pit of despair, the technology returns and society takes a more measured and realistic view of it where we finally get to see the real impact.

This is a process known as the hype cycle and we're still in initial phase of optimism and exuberance in my view -- which also means we could be soon experiencing a slump (or perhaps "pop" might be a better term). 

To see this in action, and to understand what might lay ahead of us with AI, let's take a look at the internet, arguably the closest comparable we have for AI.

The internet will go down as one of the most important inventions of all time.

Every man and his dog was launching a "Dotcom" company in the late 90s, selling hopes and dreams of what their website would add to the world -- important note, these hopes and dreams did not always include profit and cash flow.

Share prices for anything techy skyrocketed, until they stopped.

Then the bubble burst and many of these Dotcom companies would vanish in a cloud of bankruptcy. From the depths of this crash emerged the real winners, such as Amazon (NASDAQ:AMZN). It was these companies that would go on to become some of the best investments in financial market history.

The automotive and airline industries also went through a similar expansion, bust, consolidation cycle where many companies washed out and a small few aggregated the rewards on offer.

It is this history that investors need to keep in mind in a world of skyrocketing share prices and excitement regarding AI.

Reality tends to not do extremes. 

The future of AI is likely not going to be all sunshine and rainbows or dystopian wasteland. It's likely to instead be somewhere in the middle. 

Also, not every company will be a winner, in fact, it will likely be a very small cohort of companies that accrue all the rewards or returns. These will be the companies who are able to build scale, differentiate, gain customer appeal and offer real solutions rather than hype.

With valuations arguably already sky-high, time is of the essence.

In short, don't focus on the trend, find the winners of it.