C3.ai CEO Warns of AI Overhype, Emphasizes 'Meat and Potatoes' Applications

C3.ai founder and CEO Tom Siebel cautioned against the irrational exuberance surrounding AI technology during an interview with Yahoo Finance on Friday. While acknowledging the transformative potential of generative AI, Siebel highlighted the overvaluation of many companies in the space, particularly those leveraging large language models like ChatGPT.

"The market tends to, when something important happens, irrationally overvalue these things," Siebel said, drawing parallels to the dot-com bubble of the early 2000s. "It's pretty frothy," he added, referencing the high valuations and lack of concrete business models for many generative AI startups.

Siebel cited OpenAI, the company behind ChatGPT, as a prime example of this overblown hype. He pointed out that the company recently received a $150 billion valuation, a figure comparable to large, established companies like Shell. "[OpenAI] could be gone next Monday," he remarked. "And if it were gone, nobody would notice."

Despite his concerns about the overvaluation of generative AI, Siebel emphasized the significant impact of AI beyond these flashy applications. He advocated for the value of "meat and potatoes" AI applications that drive business productivity. Shifting his focus from the hype surrounding generative AI, Siebel highlighted C3.ai's focus on "unsexy" areas like production optimization, smart grid analytics, and predictive maintenance. "We're involved in kind of meat and potatoes, running the business, supply chain optimization," he explained.

Siebel further challenged the notion that AI will lead to widespread job losses, arguing that it will ultimately increase productivity across all sectors. He drew a historical parallel, stating, “For every person who lost their job working on a jacquard loom, we created [thousands of] jobs on production lines,” emphasizing the job-creating potential of AI.

When asked about the future of AI, Siebel remained optimistic about the broader field of AI, particularly highlighting Nvidia's leadership and importance in the space. "If Nvidia disappeared tomorrow, it'd be the end of the world," said Siebel, adding that while there will be legitimate competitors to Nvidia, he remains confident in their continued success.