Yahoo’s Jerry Yang on AI: “The Wave Is Coming”
The AI sector is generating extraordinary excitement, with tech stocks like NVIDIA experiencing exponential growth. However, Yahoo co-founder and tech investor Jerry Yang warns that AI’s meteoric rise comes with both opportunities and risks.
“I think the AI wave is coming,” Yang said during the 100th episode of Yahoo Finance’s Opening Bid podcast. “Maybe it’s upon us, depending on who you talk to.” Yang, now 56, has been a prominent figure in the tech industry since co-founding Yahoo in 1994 with David Filo while both were doctoral students at Stanford.
Initially launched as “Jerry’s Guide to the World Wide Web,” the project quickly evolved into Yahoo, an acronym for “Yet Another Hierarchical Officious Oracle.” Yahoo went public in 1996, riding the wave of the internet boom.
Lessons From Past Tech Waves
Drawing on decades of experience, Yang compared AI’s trajectory to previous technological waves. “We’ve seen a few waves of technology, and with each one, [we] go through this hype cycle,” he explained. “And then you cross the chasm and come to the other side.”
Yang is no stranger to navigating tech bubbles. Yahoo’s valuation surged during the dot-com boom of the late 1990s, but the subsequent crash forced the industry to realign with sustainable growth metrics. He believes AI may follow a similar path.
By 2024, Nvidia had become the world’s most valuable public company, and OpenAI, the maker of ChatGPT, reached a valuation of $157 billion. Despite their impressive growth, profitability remains elusive for many AI companies, raising concerns about overvaluation.
A Cautious Optimism for AI
Yang’s insights come as the AI sector experiences a frenzy of investment and innovation. “If you go now to certain parts of [San Francisco], it’s AI central,” he said, highlighting the influx of talent and resources into the field. While he acknowledged the risk of an AI bubble, he also noted its transformative potential, calling the future “really incredible.”
Fellow tech veteran Tom Siebel, founder of C3.ai (AI), echoed these sentiments, emphasizing the value generative AI brings while warning of overconfidence in the sector. “OpenAI could be gone next Monday,” Siebel cautioned, reflecting the volatility of emerging technologies.
Charting AI’s Path Forward
Unlike the early days of the internet, when “there was no playbook,” Yang believes today’s tech entrepreneurs benefit from hindsight. This advantage may help them navigate the challenges of scaling AI solutions effectively.
Yang’s current role as founding partner of AME Cloud Ventures focuses on early-stage investments in breakthrough technologies like quantum computing. His perspective on AI is shaped by decades of experience, offering a balanced view of the opportunities and risks ahead.
“The AI wave is coming,” Yang reiterated. “It’s going to be part bubble, but the reality also is going to be really incredible.”, As AI continues to evolve, Yang’s tempered optimism serves as a reminder that sustainable growth, rather than unchecked exuberance, will define the sector’s long-term success.
