Sir Nick Clegg has warned that many of the valuations in the AI industry are \u201ccrackers\u201d as the sector grapples with doubts over the returns it can generate on the tens of billions invested in machine learning technologies.<\/p>\n
The former deputy prime minister and Meta executive told delegates at The Times Tech Summit he had not seen many business models based on AI that would be able to make a return on their investment and could be \u201cvery exposed in market correction\u201d.<\/p>\n
Clegg\u2019s comments come after he stepped down from his role as president for global affairs at Meta, formerly known as Facebook, this year, having joined the company in 2018.<\/p>\n
\u2022 Darktrace boss: I was deepfaked and I couldn\u2019t tell difference<\/b><\/a><\/p>\n He said: \u201cI think there\u2019s certainly a correction in terms of valuations. These valuations do, for all the reasons that people have commented on endlessly, do seem pretty crackers. <\/p>\n \u201cI don\u2019t see any business model yet, even of the leading AI hyperscalers that can recoup that capital expenditure. But even if there is a correction, and there will be a shake-out, some of the AI labs that don\u2019t have a particularly good business model\u2026 will be very exposed in a market correction.\u201d <\/p>\n Clegg\u2019s comments come amid concerns of a bubble in the AI sector after the IMF\u2019s chief economist drew parallels to the dotcom bubble of the early 2000s<\/a>, in which $5 trillion was wiped from the market, and the Bank of England warned of a \u201csudden correction\u201d in valuations.<\/p>\n The former deputy prime minister also criticised the UK\u2019s \u201clevel of dependency\u201d on technology from the US, stating that the country is in a \u201cperilous state\u201d given its lack of homegrown infrastructure and assets. <\/p>\n