According to Mashable, business and AI leaders are growing increasingly nervous about a potential AI bubble that could disrupt the wider economy. The concern comes as Stanford University’s 2025 AI Index Report shows U.S. AI investment hit $109.1 billion in 2024, which is 12 times higher than China’s investment and 24 times the UK’s. Major figures including Goldman Sachs’ David Solomon, Morgan Stanley’s Ted Pick, investor Michael Burry, and Picsart CEO Hovhannes Avoyan have all expressed bubble concerns. Even DeepL CEO Jarek Kutylowski admitted evaluations are “pretty exaggerated” with “signs of a bubble on the horizon.” OpenAI’s Sam Altman previously told reporters that while AI is genuinely important, investors have become “overexcited” about the technology.
The smart money is getting nervous
When you’ve got the CEO of one of the hottest AI companies basically saying “yeah, we’re probably in a bubble,” you should probably pay attention. Sam Altman‘s dinner comments to reporters back in August were particularly telling because he acknowledged both truths – that AI is genuinely transformative AND that investors have lost their minds. It’s that classic bubble pattern where there’s a real technological breakthrough, but then the market goes completely bananas.
And let’s be real – $109 billion in U.S. investment alone? That’s absolutely insane money. For context, that’s more than the GDP of some small countries. The fact that it dwarfs China’s investment by 12 times and the UK’s by 24 times shows just how concentrated this frenzy is in American markets. When Michael Burry – the guy who famously predicted the 2008 housing crash – starts warning about AI, maybe we should listen.
So what happens if this pops?
Here’s the thing about bubbles – they always pop eventually. The question isn’t if, but when and how messy it gets. The dot-com crash wiped out trillions in market value and took years to recover from. The crypto collapses vaporized fortunes overnight. An AI bubble bursting could be particularly nasty because so much of the current tech recovery narrative is tied to AI optimism.
But here’s the crucial distinction Altman made: the internet was real, technology was important, but people got overexcited. Same story with AI. The underlying technology isn’t going away – large language models, computer vision, all that stuff is genuinely useful. But the valuations? The companies raising hundreds of millions for what amounts to a fancy wrapper around ChatGPT? Those are the ones that will disappear when the music stops.
Basically, we’re in that phase where every startup slaps “AI” on their pitch deck and expects a 10x valuation bump. Sound familiar? It should – we’ve seen this movie before with “dot-com” and “blockchain.” The real question is how much collateral damage we’ll see when reality sets in. My guess? Pretty substantial.
