A bursting bubble would be great for AI

“Bubbles are great. May the bubbles continue,” Eric Schmidt, Google’s former chief executive, recently said. For artificial intelligence to advance, companies must continue to pour record-breaking investments into AI infrastructure — or so the thinking goes. Build more data centers, and AI will find a cure for cancer, reach artificial general intelligence and beat China.

But progress usually happens under pressure. When energy gets expensive, people invent energy-saving methods. When there’s a worker shortage, they invent labor-saving machines. A deflating AI bubble may be just what the tech industry needs: As funding dries up, companies will have to build models that do more with fewer chips and less power.