AI Now Indispensable in Government, Market Operations Worldwide
The multi-billion-dollar investments flowing into data centers, coupled with skyrocketing market valuations of AI companies, have sparked widespread anxiety about an AI bubble.
Gloria Shkurti Ozdemir, an AI researcher and faculty member at Azerbaijan's Hazar University, told media that historically, governments and academic institutions spearheaded AI research and development (R&D) initiatives, but the private sector now dominates the landscape.
Ozdemir explained that AI's escalating military and geopolitical significance has generated a self-perpetuating technological cycle encompassing governments and corporations. "Companies are competing for commercial and technological superiority, while countries are prompted to fund and adopt these technologies to keep up in competition and security, triggering new waves of R&D with public funding," she said.
She referenced past technology sector ventures where reality fell short of projections, noting that bubbles can indeed collapse—citing the metaverse as an example built on immature foundations. "Interest quickly faded, but the concepts and goals did not disappear entirely; they were only postponed."
She stressed that an AI bubble remains a possibility, though any potential burst would likely avoid triggering systemic collapse and might instead produce a temporary deceleration rather than complete termination.
"Even if the AI bubble bursts, economic competition, geopolitical imperatives, and the foundational role of AI will prevent the development and funding of it from stopping entirely," she added.
Agah Tugrul Korucu, an AI specialist and associate professor of IT, told media that AI bubble discourse stems from data quality challenges, cost-benefit equilibrium concerns, hallucinations, reliability problems, and insufficient mature engineering infrastructure.
"The collected data of companies is often scattered, incomplete, or inconsistent, which can lead to AI responding with incorrect information while using definitive language—this requires caution, especially in health care, finance, and law," he said. "The cost of model development sometimes does not offset the short-term gains, dampening expectations—but this doesn't mean it's an AI bubble; there are other key factors to tell the technology's maturation."
"I can say this for certain: AI will become as natural as electricity in our lives in the long term," he added.
Korucu noted that sustainability challenges also amplify AI bubble conversations, with the industry countering through smaller, specialized models designed to cut costs and energy consumption.
"With AI, we're seeing a rise in labor productivity—an industrial project analysis that would otherwise take an expert eight hours may be done in minutes by AI, which gives experts time to use for more creative or strategic tasks instead of routine work," he said. "AI-powered systems in robotic production lines can monitor micron-level errors, which in turn improve quality and reduce costs."
"Repetitive, heavy, risky, and delicate tasks can now be done by AI-powered robots, ensuring job safety and uninterrupted operations, while data-driven decision-making mechanisms enable managers to act with evidence rather than based on intuition," he added.
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