The AI Bubble Debate: 8 Business Leaders Weigh in

OpenAI CEO Sam Altman said that the AI market is in a bubble.

“When bubbles happen, smart people get overexcited about a kernel of truth,” Altman recently told reporters, per The Verge.

Altman said this describes the state of play.

“Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes,” he said.

Former Google CEO Eric Schmidt said just because it looks like a bubble doesn’t mean that it is.

“I think it’s unlikely, based on my experience, that this is a bubble,” Schmidt said in July during an appearance at the RAISE Summit in Paris. “It’s much more likely that you’re seeing a whole new industrial structure.”

Schmidt said it takes solace in where the hardware and chips markets stand.

“You have these massive data centers, and Nvidia is quite happy to sell them all the chips,” he said. “I’ve never seen a situation where hardware capacity was not taken up by software.”

Alibaba cofounder Joe Tsai has voiced concerns about the scramble for data centers needed to help power the next generation of AI models.

“I start to see the beginning of some kind of bubble,” Tsai told the HSBC Global Investment Summit in March, Bloomberg News reported.

Tsai said he’s worried the building rush might outpace demand.

“I start to get worried when people are building data centers on spec,” he said. “There are a number of people coming up, funds coming out, to raise billions or millions of capital.”

AMD CEO Lisa Su says the bubble talk “is completely wrong.”

“For those who are talking about a ‘bubble,’ I think they’re being too narrow in their thinking of, what is the return on investment today or over the next six months,” Su told Time Magazine in 2024. “I think you have to look at this technology arc for AI over the next five years, and how does it fundamentally change everything that we do? And I really believe that AI has that potential.”

Hedge fund icon Ray Dalio voiced concerns about a bubble earlier this year, when DeepSeek’s rollout led analysts to rethink AI’s outlook.

“Where we are in the cycle right now is very similar to where we were between 1998 or 1999,” Dalio told the Financial Times in January. “There’s a major new technology that certainly will change the world and be successful. But some people are confusing that with the investments being successful.”

At the time, Dalio cited high stock prices and high interest rates. The good news is that Wall Street widely expects the Federal Reserve to cut rates during its September meeting.

Billionaire tech CEO Thomas Siebel said there is “absolutely” an AI bubble and that it’s “huge.”

“So we have this similar thing going on with generative AI that we’ve seen with previous technologies,” Siebel told Fortune in January. “The market is way, way overvaluing.”

Siebel, who leads C3.ai, singled out OpenAI in terms of overevaluations.

“If it disappeared, it wouldn’t make any difference in the world,” he said. “Nothing would change. I mean, nobody’s life would change. No company would change. Microsoft would find something else to power Copilot. There’s like 10 other products available that would do it equally as good.”

Mark Cuban, who famously sold Broadcast.com just before the dot-com bubble burst, said he doesn’t see similarities to the current situation.

“There were people creating companies with just a website and going public. That’s a bubble where there’s no intrinsic value at all,” Cuban told podcaster Lex Fridman in 2024. ‘”People aren’t even trying to make operating cap profits, they’re just trying to leverage the frothiness of the stock market, that’s a bubble. You don’t see that right now. “

Cuban took particular notice of the quality of AI companies going public.

“We’re not seeing funky AI companies just go public,” he said. “If all of a sudden we see a rush of companies who are skins on other people’s models or just creating models to create models that are going public, then yeah, that’s probably the start of a bubble.”