On August 18, 2025, OpenAI CEO Sam Altman delivered a stark warning to the technology and investment world: the artificial intelligence (AI) market, he believes, is in a bubble. His remarks, made in interviews with outlets including The Verge and CNBC, have rippled through Silicon Valley and Wall Street, igniting fresh debates about the sustainability of the AI boom and the future of some of the world’s largest companies.
Altman, whose company OpenAI has been at the forefront of the generative AI revolution, didn’t mince words. “When bubbles happen, smart people get overexcited about a kernel of truth,” he told a group of reporters, as cited by The Verge. He continued, “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.”
His comments draw a pointed comparison to the infamous dot-com bubble of the late 1990s and early 2000s—a period marked by frenzied investment in internet companies, many of which ultimately failed to deliver profits or even meaningful revenue. Between March 2000 and October 2002, the Nasdaq Composite index plummeted nearly 80% as the bubble burst, wiping out trillions in market value. According to Altman, today’s AI fever carries echoes of that era: “If you look at most of the bubbles in history, there’s always a kernel of truth that gets blown out of proportion.”
Altman isn’t alone in his concerns. Bridgewater Associates’ Ray Dalio, Alibaba co-founder Joe Tsai, and Apollo Global Management chief economist Torsten Sløk have all sounded alarms about the pace and scale of AI investment. Sløk, in a July 2025 report for Apollo Academy, went so far as to claim that the current AI bubble “surpasses the internet bubble in size,” arguing that the top 10 companies in the S&P 500 are now more overvalued than they were at the height of the 1990s IT mania.
It’s a warning that resonates with the numbers. Major technology giants—including Meta Platforms, Microsoft, and Amazon—are investing tens of billions of dollars in AI infrastructure this year alone. Microsoft, OpenAI’s largest backer, has pumped over $10 billion into the startup and seen its own stock price soar from $311 in August 2023 to over $520 by August 2025, a 67% jump. Meta’s stock has fared even better, nearly tripling from $274 to $785 over the same period. These gains, while supported by strong earnings, are difficult to explain without factoring in the speculative enthusiasm surrounding AI.
But is it all hype? Some industry watchers aren’t convinced the bubble is universal. Ray Wang, research director for semiconductors and emerging technology at Futurum Group, offered a nuanced view to CNBC: “From the perspective of broader investment in AI and semiconductors... I don’t see it as a bubble. The fundamentals across the supply chain remain strong, and the long-term trajectory of the AI trend supports continued investment.” Still, Wang acknowledged, “there is an increasing amount of speculative capital chasing companies with weaker fundamentals and only perceived potential, which could create pockets of overvaluation.”
Evidence of speculative excess isn’t hard to find. Earlier this year, Chinese startup DeepSeek claimed to have trained a competitive reasoning AI model for less than $6 million—a fraction of the billions being spent by U.S. leaders like OpenAI. While some viewed this as a sign of disruptive innovation, others met the claims with skepticism, questioning whether such low-cost breakthroughs could truly rival the capabilities of more expensive models.
Even OpenAI, despite its soaring revenue projections, isn’t immune to the uncertainties of the AI market. Altman revealed earlier in August that the company is on track to surpass $20 billion in annual recurring revenue this year. Yet, remarkably, OpenAI remains unprofitable—a fact that underscores the high costs and long timelines associated with cutting-edge AI development.
The company’s latest product launch has also been rocky. The release of GPT-5, OpenAI’s newest large language model, was met with criticism for having a less intuitive feel than its predecessor. Paying customers clamored for the return of GPT-4, prompting OpenAI to reinstate access to the older model. The stumble has led Altman to adopt a more cautious tone regarding the industry’s most bullish forecasts. Asked by CNBC whether GPT-5 brings the world closer to artificial general intelligence (AGI)—the holy grail of AI that can perform any intellectual task a human can—he replied that the term “AGI” is losing relevance, hinting at the complexity and unpredictability of true AI progress.
Still, investor faith in OpenAI appears undiminished. According to CNBC, the company is preparing a $6 billion secondary stock sale that would value it at an eye-popping $500 billion. This follows a $40 billion funding round in March 2025 at a $300 billion valuation—by far the largest ever for a private tech company. Altman has also discussed OpenAI’s ambitions beyond software, including expansion into consumer hardware, brain-computer interfaces, and even social media. He’s signaled that OpenAI expects to spend trillions of dollars on data center buildout in the “not very distant future.” And in a surprising aside, he expressed interest in acquiring Chrome if the U.S. government were ever to force Google to divest the popular browser.
The stakes for the broader tech sector are enormous. As 24/7 Wall St. pointed out, a bursting of the AI bubble could trigger a significant sell-off in the stocks of America’s largest companies—the so-called “Magnificent 7”—whose valuations are now heavily tied to AI-driven growth. The question is whether the current surge in AI investment and enthusiasm is justified by real-world advances, or whether it’s another case of “smart people getting overexcited about a kernel of truth.”
For now, the only certainty is uncertainty. As Altman himself wryly observed when asked whether he’d still be OpenAI’s CEO in a few years: “I mean, maybe an AI is in three years. That’s a long time.” The AI revolution, it seems, is as unpredictable as it is transformative—and investors, executives, and everyday users alike will have to navigate its twists and turns with caution and curiosity.
