Taiwan’s long, hot AI summer
It’s been a long, hot summer here in Taiwan characterized by record-breaking temperatures and record-breaking revenues and stock prices for the island’s technology giants driven by voracious demand for AI servers.
While temperatures should start to decline within (I hope) the next month or so, it is impossible to predict whether Taiwan technology stocks will fall along with it or continue their dizzying rise.
Although all the main cloud service providers have indicated that they will continue to purchase every AI server chip that Nvidia and AMD can have made at TSMC, there are growing signs of disquiet among enterprise users and consumers that the great generative AI revolution is not quite what it has been cracked up to be. Despite all the hype about the disruptive potential of this new technology, not a single killer app has yet taken the market by storm. Despite all the hype about the disruptive potential of this new technology, not a single killer app has yet taken the market by storm. Instead of making it possible for us to create full-length Hollywood movies for less than a $1,000 at our desks, all it currently enables us to do is create marginally prettier images and middle school essays and presentations.
The current limitations of the technology do not of course mean that global investments in the generative AI will come to a screaming halt as they did with the Metaverse. However, a slowdown in market growth is quite possible over the next few months as enterprises grapple with the challenges of integrating the technology in their operational processes and workflows and hardware manufacturers try to figure out how to sprinkle more AI magic in their forthcoming PC and smartphone launches to persuade struggling consumers to open their wallets and purses.
As Taiwan’s AI summer approaches its end, turbulence lies ahead. The island’s tech industry must be prepared to navigate the forthcoming squalls and storms if it wants to avoid a harsh winter and emerge stronger on the other side.
