A market being a bubble does not imply that there is no utility for the products in that market.
> but I do think the market might have an overly optimistic view on the success of AI
This is exactly the definition of a "bubble".
But it's hard to argue with the results of the progress in AI over the last few years. I have no idea how that will translate for investors, but I wouldn't be surprised if AI fundamentally changes the stock market into something fully automatic within the next decade.
If it's reliably better at trading than people, then whoever has the most hardware is going to be able to make the best predictions, allowing them to buy more hardware and make better predictions. In 10 years, what's the purpose of a human trader?
Automated trading already exists, but automated trading firms value explainability and reproducibility. Most common models in the quant trading space are linear regressions - they are simple and explainable. If you made an AI trade, it better be explainable, but explainable AI seems pretty far away at this point and it doesn't seem like something many companies care about right now.
And despite all the automation in the trading space, there are still traders. Humans are decent at analyzing idiocyncratic events (0-shot learning), but machines are not (yet).
Again, I'm no expert in trading, and I'm sure you understand the processes better than I do. I know that automation has been a big part of trading for a long time. But is fully automated and fully explainable AI really that far off? As in unattainable within the next decade? We're all guessing here, but judging on recent progress, I would bet that AI will be able to do everything a human trader could do, including providing the rationalization in a comprehensible and convincing way to managers, within 10 years at the very least, probably sooner. I would bet that AI can even do a better job of hitting the specific points that will be convincing to target the decision makers before that.
The focus on AI in the stock market is already evidence of that. Right now, it's the people boosting AI that are convincing investors to put their money into it. And once they're invested, they're going to be more likely to be convinced by confirmation bias, therefore more likely to listen to the advice generated by the product that they already invested in. That's a cycle that will be hard to break.
There is no such thing as bubble definition. Everyone has one depending on their point of view. You have one.
> the market might have an overly optimistic view on the success of AI
What is overly optimistic? How much overly is overly? Nuance matters, as with everything. Also timing. Most if not all of the outrageous ideas during the dotcom era have been realized in the 20 years since.