Nvidia is said to be having trouble with its latest chip as an influential hedge fund says AI is overhyped and that Nvidia shares are in a bubble and have further to drop after last month’s 20% fall.

Elliott Management told its clients that “AI is overhyped with many applications not ready for prime time.” Many of AI’s supposed uses, it says, “are never going to be cost-efficient, are never going to actually work right, will take up too much energy, or will prove to be untrustworthy.”

NVIDIA-Blackwell-Architecture-Image-600-150x150.jpgBlackwell, Nvidia’s latest AI chip, is said to be delayed after Microsoft was reportedly  told that volume shipments would be delayed until Q1 2025. The delay will help AMD, Intel and the hyperscalers which develop their own processors

Elliott, which has only a $4.5 million investment in Nvidia, reckons: “There are few real uses” for AI other than “summarising notes of meetings, generating reports and helping with computer coding”.

 

Elliott is not the first to question the value of AI. In June, a Goldman Sachs report said that, despite $1 trillion in future capex intentions, AI “has little to show for it so far” and, in July, the Economist reckoned that AI had had “almost no economic impact”.