Is AI a Bubble? Here’s What the Experts Say

Trillions of dollars are being spent on AI.

Startups with no profits are raising billions.

Big companies like NVIDIA, Microsoft, Amazon, Meta, Google, and OpenAI are valued at very high prices.

Every company now wants to say, “We are in AI too.”

And investors are betting on this as if there is no tomorrow.

This is a classic case, similar to “Tulip Mania.”

That’s how bubbles form.

Not because people are foolish, but because they fear missing out.

The herd mentality drives them to extremes.

And the funny thing is:- the same people who warn about an AI bubble are the ones spending the most money on it.

What experts say

And here is what industry leaders are saying about AI.

“Are we in an AI bubble? Of course. Of course we are. We’re hyped, we’re accelerating, we’re putting enormous leverage into the system.” — Pat Gelsinger, Former Intel CEO

“There’s definitely a possibility, at least empirically, that something like [the dot-com bubble] could happen here.” — Mark Zuckerberg, Meta CEO

“Are we in a phase where investors as a whole are over-excited about AI? My opinion is yes.”— Sam Altman, OpenAI CEO
“This is a kind of industrial bubble … Investors have a hard time distinguishing between the good ideas and the bad ideas.”— Jeff Bezos, Amazon Founder

“I wouldn’t be surprised if, in the next 12 to 24 months, we see a drawdown in equity markets. There are going to be winners and losers.”— David Solomon, Goldman Sachs CEO

“Today’s surging investment in artificial intelligence echoes the dot-com boom of the late 1990s. Optimism is fuelling tech investment and lifting stock valuations.”— Pierre-Olivier Gourinchas, IMF Chief Economist
“On several measures, equity market valuations appear stretched, particularly for technology companies focused on AI. The risk of a sharp correction has increased.”— Bank of England Financial Policy Committee

The paradox: bubble talk + record spending

But here’s the twist. Every one of these people and institutions, while warning of a bubble, is spending or approving record sums.

OpenAI and its partners plan an $850 billion AI data-center buildout over the next few years.
Amazon expects to spend over $100 billion a year on AI infrastructure and R&D through AWS.
Meta is investing tens of billions in AI hardware, models, and custom chips.
Microsoft, Google, NVIDIA, and Apple each have multi-hundred-billion-dollar AI capex plans through the end of the decade.
Since 2023, venture capital firms have poured more than $200 billion into AI startups.
Global AI investment, according to Gartner and other estimates, could exceed $2 trillion by 2026–27.

Everyone sees the fog. Everyone knows the risks. Yet no one is slowing down.

The fog of uncertainty

Is AI a bubble? No one really knows. That’s the honest answer. And the confusion comes from these facts:

1. AI is real. It’s a general-purpose technology that will reshape productivity, industries, and society. Everyone knows that.

2. But the winners are unknown. No one can yet tell who will capture the value, how fast adoption will scale, or what the real profits will be.

3. And no one really knows how AI will be efficiently applied in various fields. The real use cases and their impact are still unknown.

That’s why the excitement is real, but so is the fog.

The underlying technology is transformational, but the timing, economics, and business models are deeply uncertain.

The echo of the dot-com bubble

The IMF calls today’s environment “eerily similar” to the late 1990s:

“Valuations are heading toward levels we saw during the bullishness about the internet 25 years ago.”

Back then, the internet did change the world, but most internet stocks still went to zero.

The lesson wasn’t that the technology was wrong; it was that investors were over-enthusiastic and valuation-blind.

AI may follow the same path: a short-term correction before a decades-long transformation.

Key lessons for investors

A bubble doesn’t mean the technology is fake. It means prices have run far ahead of fundamentals.

Temperament over intelligence: Greed and FOMO push many to follow the herd. Patience and discipline keep you focused on substance.
Valuation matters: Focus on companies with real cash flows, clear earnings visibility, and proven execution.
Expect volatility: Even quality businesses can fall 40–60% when sentiment flips.
Look for lasting value: The opportunity lies in where AI creates real, enduring impact, not just hype.
Think independently: Stay curious, stay rational. The fog will clear for those who remain grounded.

Final thoughts

AI is real. The progress is undeniable. We’re living through one of those rare moments in history when a new technology promises to change everything, just like electricity did in the 1900s and the internet in 1999.

But just like every major revolution, the early phase is always filled with noise, hype, and wild bets.

Some of today’s valuations will prove justified; many won’t. The hard part isn’t spotting the technology; it’s keeping your mind steady when the world around you is losing discipline.

Every bubble starts with innovation and ends with euphoria.

The story is real; it’s the herd that loses control. When everyone believes “this time is different,” that’s when the herd is usually wrong.

The Words of Wisdom

“I am personally skeptical of some of the hype that has gone into artificial intelligence. I think old-fashioned intelligence works pretty well.” — Charlie Munger,

-- Pady