Some AI companies ‘YOLOing,’ pulling the ‘risk dial too far’

The head of one of the most successful AI companies says some of his competitors are going too far in their own overspending on AI technologies.

Anthropic (ANTH.PVT) CEO Dario Amodei made his comments about the AI industry during a conversation with Andrew Ross Sorkin at the New York Times DealBook Summit on Wednesday, adding that while there’s risk in building out new technologies like AI, certain firms are plowing into an uncertain future.

“I think there’s some amount of irreducible risk here, and I absolutely don’t want to deny this,” Amodei said.

“But at the same time as that, I think there are some players who are not managing that risk well. Who are taking unwise risks.”

Amodei demurred when asked which company was taking such risks but offered the idea of a consumer AI company that has uncertain margins and is run by a person “who just kind of constitutionally … YOLOs [you only live once] things, or just likes big numbers.”

Anthropic has a number of competitors in the AI space, but its largest include Google (GOOG, GOOGL), OpenAI (OPAI.PVT), Microsoft (MSFT), and Meta (META). And while each of those companies is spending billions on AI build-outs, OpenAI stands out in particular for its more than $1 trillion in spending commitments.

Read more: How to protect your portfolio from an AI bubble

“I think there’s a real dilemma deriving from uncertainty in how quickly the economic value is going to grow, and the lag times on building the data centers that drives it,” Amodei explained when discussing the risk of an AI bubble.

“There are some players … who pull the risk dial too far. And I’m very concerned,” he explained.

The CEO also touched on the difficulties of planning when to spend on data centers, explaining he had to make calls on funding servers in 2024 for models in 2027.

Not building enough servers would mean the company wouldn’t be able to power its AI. Overspending, though, could lead to bankruptcy.

Amodei isn’t the only CEO who’s warned about an AI bubble. OpenAI CEO Sam Altman told a small group of reporters in August that there may be an AI bubble, according to the Verge.

Amazon founder Jeff Bezos also warned about overexuberance in AI spending during an appearance at Italian Tech Week in October.

Fears of an AI bubble have begun to temper some of the enthusiasm around AI-related stocks on Wall Street. Nvidia (NVDA), in particular, has seen its stock price fall 13% over the last month, though it’s up more than 33% year to date.

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.