Investors in global markets are closely watching for signs of whether demand for artificial intelligence (AI) is weakening and whether massive investments are delivering the expected return. Trillion-dollar AI investments are propelling tech giants forward but also bringing with them the risk of a financial bubble. Industry leaders, economists, and investors approach this big question from different perspectives.
Key Opinions from the Industry and the Economy
Morten Wierod, CEO of ABB:
“I don’t think it’s a bubble; however, there isn’t enough construction capacity and manpower to realize billions of dollars in investments. This process will take several years.”
Denis Machuel, CEO of Adecco:
“There is a serious disconnect between the supply of AI and the speed at which companies integrate the technology into their business processes.” According to Machuel, the Salesforce partnership could close this gap and reduce the risk of a bubble.
Sundar Pichai, Alphabet CEO:
“No company, including us, is immune to a potential AI bubble burst.” While Pichai describes the current investment frenzy as “extraordinary,” he acknowledges that there are ‘irrational’ elements in the market reminiscent of the dotcom era.
Jeff Bezos, Amazon Founder:
“When excitement about AI increases, every idea gets funded. In this environment, investors have difficulty distinguishing between good ideas and bad ideas.” Bezos notes that industrial bubbles can sometimes benefit society by accelerating innovation.
Bank of England:
Warned that a disappointment in the markets regarding AI expectations poses a risk of a sharp correction. According to the bank, the likelihood of such a shock impacting the UK financial system is “significant.”
Bryan Yeo, GIC Chief Investment Officer:
“There is a clear AI hype bubble in early-stage startups. Every startup carrying the ‘AI label’ is receiving excessively high valuations relative to its revenue.”
Joseph Briggs, Goldman Sachs Economist:
Briggs argues that the massive investments in AI infrastructure in the US are sustainable, but notes that “the ultimate winners are uncertain.”
Pierre-Olivier Gourinchas, IMF Chief Economist: He notes that the AI boom could end in a dotcom-like downturn, but that it’s unlikely to create systemic risk: “This isn’t financed by debt; therefore, shareholders would be the losers in a correction.”
Jensen Huang, Nvidia CEO: Sam Altman, OpenAI CEO: Michael Burry, Investor: Chey Tae-won, President of SK Hynix: UBS: This view Their disagreements reveal that the trillion-dollar investment wave into artificial intelligence carries both enormous opportunities and great risks.
“There’s a lot of talk about an AI bubble, but we see the opposite,” he says, highlighting the huge demand for chips from cloud companies.
“Investors are overly excited about AI right now. Some people will make a lot of money, and some will lose a lot.”
Burry, who took a short position against Nvidia and Palantir, warned of inflation in AI spending via a social media post.
“I don’t see a bubble in the AI sector; however, stocks have risen too quickly and excessively. A correction period is natural.”
Although most investors participating in the survey believe there is an AI bubble, approximately 90% still hold positions in AI stocks.
