The CEO of cybersecurity company Cato Networks may have just vindicated many people's fears of a repeat of the dot-com era.
“We're in a bubble,” Shlomo Kramer, whose company aims to secure the digital and AI transformation of organizations, told Business Insider.
Cramer said the bubble is being fueled by both high levels of investment and early profits from AI, encouraging companies to continue investing fast enough to maintain market prices despite what he described as a widening gap between valuations and reality.
“There's a dislocation there. It's big and it's trying to come undone,” Kramer said.
The CEO said he “absolutely” believes in AI and its capabilities, but questions remain about whether the investment is worth the return.
“It's going to happen at a much slower pace than it is now,” Kramer said of advances in AI.
The CEO said that if he could evaluate AI in every department of the organization that he knows about, he would: It becomes “Not yet.” For example, Kramer said AI can bring value to areas such as customer support, but it cannot replace it. It may be possible to replace the first level of support, but that's not where companies face the highest costs, he said.
“It just hasn't happened yet,” Kramer said.
The CEO similarly said that while he sees AI improving engineering capabilities in the future, the impact is currently “modest.” He said that while AI may be able to improve efficiency and productivity in certain fields and situations, it cannot replace engineers.
Kramer said he hasn't seen companies cut or lay off engineers because of AI. Even if the company claims to do so.
“I strongly suspect that any company that says they're going to fire engineers because they implement AI is actually using AI as a cover story,” Kramer said.
Although there are signs that entry-level engineering jobs are on the decline, many companies continue to hire engineers amid the AI boom, and some, like Cloudflare, are expanding their internship programs.
Kramer is the latest CEO to weigh in on the AI bubble debate. While the current investment environment has some similarities to the dot-com era, some executives believe the landscape is different now, as the impact of AI has grown in recent years.
Industry leaders are divided on this topic. The CEO of Nvidia, the chipmaker driving the AI revolution, denies the existence of an AI bubble. mark zuckerberg He said the bigger risk is not spending enough.
Meanwhile, OpenAI's Sam Altman, who led the adoption of AI with the launch of ChatGPT and has frequently championed the technology, said investors are “overly excited about AI.”
Even with a solid ChatGPT prompt, we don't have a crystal ball to know exactly how this will end.
