AI bubble? Opinions divided on tech's trillion dollar question

12/12/2025 10:23 AST

Investors are on guard for signals that demand for artificial intelligence is tailing off or that the massive spending is not paying off as anticipated.

Investments in AI, which have outstripped government-led initiatives like the Manhattan Project and the Apollo program, are reshaping global technology and drawing markets' focus to a handful of behemoth companies, but they also create risks of a financial bubble.

Here is a list of industry executives, economists, investors and analysts' takes on the topic:

Morten Wierod, CEO of ABB
"I don't think there is a bubble, but we do see some constraints in terms of construction capacity not keeping up with all the new investments," Wierod told Reuters on October 16. "We are talking about trillions in investment," he said. "That will take a few years to implement because there is not enough people and resources to build all this."

Denis Machuel, CEO OF Adecco Aden S
"There's really at the moment a disconnect between this enormous supply of AI and the way enterprises are really embedding AI in their core processes," Machuel said in November. The Swiss staffing group's joint venture with Salesforce could help reduce the risk of an AI bubble by pushing companies into more concrete uses of the technology, he added.

Sundar Pichai, CEO OF Alphabet
"I think no company is going to be immune, including us," Pichai said in an interview with the BBC published on November 18, when asked about how Google would cope with a potential bursting of a bubble. He said the current wave of AI investment was an "extraordinary moment" but acknowledged "elements of irrationality" in the market, echoing warnings of "irrational exuberance" during the dotcom era.

Jeff Bezos, Founder and executive chairman of Amazon
"When people get very excited as they are today about artificial intelligence, for example, every experiment gets funded ... And investors have a hard time in the middle of this excitement distinguishing between the good ideas and the bad ideas," Bezos said during the Italian tech week on October 3. "A bubble like a banking bubble, a crisis in the banking system, that's just bad ... The ones that are industrial are not nearly as bad, it could even be good because when the dust settles and you see who are the winners, society benefits from those inventions."

Bank of England
Global markets could tumble if investors' mood sours on the prospects for AI, the Bank of England said on October 8. "The risk of a sharp market correction has increased," the BoE's Financial Policy Committee said in a quarterly update, in its sharpest warning to date of the dangers of an AI-triggered market slump, adding that the risk of spillovers to Britain's financial system from such a shock was "material".

Bryan Yeo, Chief Investment Officer at GIC
"There's a little bit of a hype bubble going on in the early-stage venture space," said Singapore sovereign wealth fund's Yeo during a panel discussion at the Milken Institute Asia Summit on October 3. "Any company startup with an AI label will be valued right up there at huge multiples of whatever the small revenue (is) ... That might be fair for some companies and probably not for others."

Joseph Briggs, economist at Goldman Sachs' Global Economics Research
The flood of multibillion-dollar investments pouring into US AI infrastructure is sustainable, pushing back on mounting concerns that the sector's spending spree could be overheating, Briggs said in a note on October 16. While the overall macroeconomic case for AI investment remains strong, he cautioned that "the ultimate AI winners remain less clear", with fast technological change and low switching costs potentially limiting first-mover advantages.

Pierre-Olivier Gourinchas, chief economist at IMF
The AI investment boom in the US may be followed by a dotcom-style bust, but it is less likely to be a systemic event that would crater the US or global economy, Gourinchas said on October 14. "This is not financed by debt, and that means that if there is a market correction, some shareholders, some equity holders, may lose out."

Jensen Huang, Nvidia CEO
"There's been a lot of talk about an AI bubble. From our vantage point, we see something very different," Huang said on a call with analysts in November, as he touted how much cloud companies wanted his firm's chips.

Sam Altamn, CEO of OpenAI
"Are we in a phase where investors as a whole are overexcited about AI? My answer is yes," Altman told tech media The Verge in August. "Someone is going to lose a phenomenal amount of money. We don't know who, and a lot of people are going to make a phenomenal amount of money."

Michael Burry, Investor and founder of Scion Asset Management
The "Big Short" investor has placed bearish bets on Nvidia and Palantir. Last month, in his first X post in more than two years, Burry warned of a bubble, fanning investor concerns over inflated spending in the AI and tech industry.

Chey Tae-Won, Chairman of SK Hynix
"I don't see a bubble in (the AI industry)," the head of South Korean conglomerate that owns the leading memory chipmaker said in December. "But when you look at the stock markets, they rose too fast and too much, and I think it is natural that there could be some period of corrections," he said, adding that AI stocks have been climbing beyond their fundamental value.

UBS
Almost as many investors who feel we are in an AI bubble are also hanging on to their investments in the sector, UBS equity strategists said on October 14. "Most felt we were in an AI bubble, but that far from the apex of a bubble peak and thus around 90 percent of the people who said we were in a bubble said they were still invested in many of the AI-related areas."

Reuters