ALBAWABA - While some are wary of a possible AI bubble, others investing heavily into it - foreseeing returns on investments in 10-15 years, one such country is South Korea.
South Korea cementing its already renowned status of a tech and innovation hub and powerhouse has decided to invest nearly a quadrillion won ($650 million) in AI data centers over the next nine years.
"By 2035, we will build additional AI data centers with a capacity of 10 gigawatts, bringing the total capacity to 18.4 gigawatts and the total investment to over 1,000 trillion won," Science Minister Bae Kyung-hoon told reporters.
While investments into AI seems like a no-brainer, many analysts are quite hesitant to do so - as the AI boom has shown symptoms consistent with a bubble, similar to the housing bubble that crashed the world economy in 2008.
Alarmist analysts cite unpredictable and unreal growth - as companies with a low cash flow are priced extremely expensively in the stock market; alongside the not insignificant amount of debt companies are taking on to invest into AI, and finally; the worrying date of when the ROIs are set to return to investors and whether these low cash flow firms would be able to pay off their debts and investments or if they will spiral into defaults and start selling their debt, as we have seen happen 18 years ago.
In any case, it seems South Korea is betting on the former.
