"Do you want to have a novel entrepreneurial startup pure play which has no revenues and no profits today, but could be a moonshot if it works?"
"Or do you want to invest in a great tech company, which is already existing and making a lot of money where AI could be incremental but not life-changing? It's a choice."
"People say, 'Well, they have a low probability of success, but maybe a big payoff, so I should buy it.' That's what I call lottery-ticket mentality."
AI hype is fueling risky 'moonshot' bets on startups with no revenues or profits, prompting many investors to prioritize potential jackpot payoffs over realistic odds. Investors increasingly treat AI investments like lottery tickets, accepting low probabilities of success for the chance of outsized returns. Most AI newcomers are likely to fail and new technologies rarely guarantee investor profits. Established, profitable technology companies can better absorb AI-driven changes and offer lower-risk exposure. Historical bubble patterns, such as the dot-com era and prior growth-stock booms, mirror current exuberance and warn that early enthusiasm often leads to widespread overvaluation.
Read at Business Insider
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