Renowned economist and Nobel Prize winner Paul Romer has raised concerns about the current surge in artificial intelligence, likening it to the cryptocurrency bubble from a couple of years ago. Speaking at the UBS Asian Investment Conference in Hong Kong on May 29, Romer suggested that the excitement surrounding AI might be overblown, and investors should carefully consider the technology's real potential.

In a discussion with Bloomberg TV, Romer expressed his skepticism, saying, "When people project this forward, I think they’re at risk of making a very serious mistake." He highlighted that the rapid growth and heightened market enthusiasm for AI could be short-lived, contrary to what many anticipate.

The recent developments in AI, such as OpenAI’s ChatGPT and xAI’s Grok, have sparked significant interest and investment in AI technology. However, Romer warned against the assumption that these advancements will continue at the same pace indefinitely. He pointed out the impressive rise of tech giants like Microsoft, Alibaba, and Nvidia, which have achieved massive valuations during the AI surge.

Romer stressed that while increasing computing power is relatively easy—simply by adding more hardware—the true hurdle lies in the availability of data, which is a limited resource. He cautioned that the current rapid pace of AI development could slow down due to this data scarcity.

Romer’s comments have led to a more cautious approach among investors, especially those involved in AI and cryptocurrency. If AI's seemingly boundless potential encounters finite limitations, as Romer suggests, the market could face significant instability.

On the same day Romer spoke, the market value for AI and Big Data cryptocurrencies fell by 0.58% to $40.63 billion, with a 4% decrease in trading volume to $2.67 billion. Despite AI's recent growth, a report from CoinGape Media highlighted that meme coins have unexpectedly provided higher returns on investment.

Romer also predicted that in the next couple of years, people might realize they have overestimated the progress in AI, drawing comparisons to a market bubble. While Romer’s cautious outlook serves as a warning, many in the industry remain hopeful about the future potential of AI-related cryptocurrencies.

In conclusion, Paul Romer's insights remind us to manage our expectations and approach AI investments with caution, reflecting on the lessons learned from past market bubbles.