Kong CEO: AI bubble may burst, but hyperscaling will eventually pay off

The AI ​​bubble might burst, but Kong CEO Augusto “Aghi” Marietti told Business Insider he thinks it will be worth it.

AI companies will ultimately need the massive infrastructure projects they are spending so much money on, he said.

“We’re in this new era of manufacturers where it’s a very singular moment where we’re probably going to deploy more investment and more capital to enable the AI ​​era, and we need that,” Marietti told Business Insider.

Marietti said energy-related issues are likely to be the biggest bottleneck holding back AI’s growth. Business Insider has documented how AI companies need power for their large data centers so badly that some are building standalone supplies.

“We don’t have the power we need to power all the GPUs the following year,” he said.

Wall Street, however, is worried about the sustainability of the capital spending craze from leading AI startups and other big tech companies, which is generating all sorts of talk of bubbles. A Business Insider analysis found that Amazon, Microsoft, Meta, and Google could spend around $320 billion in investments, primarily for AI-related needs.

OpenAI CEO Sam Altman said in August that he agreed that AI could be in a bubble phase, echoing others who warned that spending could not be sustained. Some economists say investment spending is currently so high that it is supporting the entire U.S. economy.

Like Altman and others, Marietti compared current spending to the construction of railroads in the United States in the 19th century. AI optimists argue that AI, like railways, will fundamentally transform the economy and, therefore, massive spending is needed to set the stage for what is to come.

“Some railways were deployed in advance, but then all the railways were used,” he explained. “I think in AI we just deploy in advance, and eventually something will blow up a little bit, but we’ll eventually need the infrastructure that we deploy anyway.”

OpenAI President Greg Brockman suggested that soon, every person will want their own GPU, a level of demand that would require massive expansion by his company and others.

Marietti said even “one moment of depression” won’t stop what’s coming.

“After that, we will continue to use all the infrastructure we build,” he said. “We are still using the railways that we deployed 150 years ago in advance.”