On August 18, 2025, OpenAI CEO Sam Altman issued a stark warning to the technology and financial worlds: the current frenzy of investment in artificial intelligence might be inflating a bubble reminiscent of the infamous dot-com crash of the early 2000s. Speaking candidly during a dinner with reporters in San Francisco, Altman didn’t mince words. “When bubbles happen, smart people get overexcited about a kernel of truth,” he said, as reported by The Verge. “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.”
Altman’s comments come at a time when the artificial intelligence sector is attracting unprecedented sums of money, with companies and investors racing to stake their claim in what many believe is a transformational technology. But with excitement comes risk, and Altman’s warning is echoed by a growing chorus of economists, strategists, and industry insiders who see signs of irrational exuberance—and potential trouble ahead.
Drawing a direct comparison to the late 1990s tech bubble, Altman reminded attendees that the Nasdaq lost nearly 80% of its value between March 2000 and October 2002 after a wave of internet startups failed to deliver on their promises. “If you look at most of the bubbles in history, like the tech bubble, there was a real thing. Tech was really important. The internet was a really big deal. People got overexcited,” he said. The current AI boom, he argued, is driven by a similar dynamic: a genuine breakthrough technology, but also a frenzy of cash chasing anything labeled ‘AI.’
That duality—AI as both a once-in-a-generation breakthrough and a speculative mania—has become Altman’s current reality. Even as he acknowledged the bubble dynamics, he emphasized that OpenAI is moving forward aggressively. “You should expect OpenAI to spend trillions of dollars on data center construction in the not very distant future,” Altman said, highlighting the company’s bet that today’s infrastructure investments will outlast whatever correction may come. “We have to make these horrible trade-offs right now. We have better models, and we just can’t offer them because we don’t have the capacity.”
His caution is shared by others. In a report released last month, Torsten Slok, chief economist at Apollo Global Management, argued that the so-called AI bubble may actually be bigger than the late 1990s internet bubble, with the top 10 companies in the S&P 500 more overvalued than ever before. Bridgewater founder Ray Dalio recently told the Financial Times that dangerously high valuations, coupled with elevated interest rates, could “prick the bubble,” making today’s market look eerily similar to 1999. “There’s a major new technology that certainly will change the world and be successful,” Dalio said, “but some people are confusing that with the investments being successful.”
Wall Street strategists are also sounding alarms. Bank of America’s Michael Hartnett has flagged that the S&P 500’s price-to-book ratio hit 5.3, topping dot-com levels, while forward price-to-earnings ratios hover around territory last seen in 1929. Richard Bernstein, a veteran investor, has urged clients to avoid chasing “AI FOMO” and instead rotate into more defensive sectors. UBS strategists added to the chorus on August 18, warning that the AI boom—now fueled by private credit firms and lenders—has increased the risk of overheating in the sector. They noted that private credit debt in technology has surged by nearly 29%, or $100 billion, in the past year alone.
This surge in private capital is reshaping the landscape. Tech giants like Microsoft, Amazon, Alphabet, and Meta plan to spend a staggering $344 billion in 2025, primarily on AI-driven initiatives. Meta recently tapped Pacific Investment Management Co. and Blue Owl Capital to lead a $29 billion financing for a data center expansion in rural Louisiana, while Amazon and OpenAI have similar plans for their own data center sites, according to Bloomberg. UBS cautioned that this growth could “sustain significant growth plans for AI and other hyperscaler companies, sowing the seeds of an upside scenario and increasing overheating risk.”
Despite these warnings, some experts remain optimistic. Ray Wang of Futurum Group told CNBC that, from the perspective of broader investment in AI and semiconductors, he doesn’t see the current environment as a bubble. “The fundamentals across the supply chain remain strong, and the long-term trajectory of the AI trend supports continued investment,” he said, though he acknowledged that speculative capital could lead to pockets of overvaluation. Kyle Okamoto, chief technology officer at Aethir, described the situation as a supply chain bottleneck rather than a classic bubble, with “too much capital with real need, chasing too little compute.” He suggested that until infrastructure catches up, prices and hype will stay inflated, but that’s “not a bubble bursting—that’s a market maturing.”
Altman himself addressed some of OpenAI’s recent stumbles, notably the disappointing launch of ChatGPT-5. “I think we totally screwed up some things on the rollout,” he admitted, but pointed out that API traffic doubled in 48 hours and GPU demand spiked. Despite the hiccup, ChatGPT “has been hitting a new high of users every day.” Altman remains bullish on ChatGPT’s trajectory, envisioning that “pretty soon, billions of people a day will be talking to ChatGPT. We’re the fifth biggest website in the world right now. I think we’re on the clear path to the third.” Surpassing Google, however, would be “really hard,” he conceded.
OpenAI is on track to pass $20 billion in annual recurring revenue but remains unprofitable as of August 2025. The company’s recent fundraising efforts are eye-popping: In March, OpenAI raised $40 billion at a $300 billion valuation and is preparing to sell around $6 billion in stock at roughly a $500 billion valuation. Altman expects the company’s spending on data center expansions to reach into the trillions, underscoring the scale of ambition—and risk—involved.
Beyond chatbots and cloud infrastructure, Altman confirmed that OpenAI is exploring brain-computer interfaces, aiming to rival Elon Musk’s Neuralink. “I think neural interfaces are cool ideas to explore,” he said, adding that he’d like to “be able to think something and have ChatGPT respond to it.” He also took a subtle jab at Musk’s Grok chatbot, saying, “You will definitely see some companies go make Japanese anime sex bots because they think that they’ve identified something here that works. You will not see us do that. We will continue to work hard at making a useful app, and we will try to let users use it the way they want, but not so much that people who have really fragile mental states get exploited accidentally.”
Altman also reflected on his own future, noting, “I’m not a naturally well-suited person to be a public company CEO. Can you imagine me on an earnings call?” Jokingly, he suggested that perhaps in three years, an AI could be running OpenAI: “That’s a long time.”
While the optimism and ambition in the AI sector are palpable, Altman’s warnings—and those of other industry veterans—serve as a reminder that unchecked exuberance can have consequences. The infrastructure and innovation being built today may well outlast the hype, but as history shows, markets don’t stay aloft forever.
