AI bubble

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The AI bubble is a theorised ongoing stock market bubble, occurring during the AI boom, an ongoing period of rapid progression in artificial intelligence (AI).

Contents

Background

This paragraph is an excerpt from AI boom.[ edit ]
The AI boom [1] [2] is an ongoing period of progress in the field of artificial intelligence (AI) that started in the late 2010s before gaining international prominence in the 2020s. Examples include generative AI technologies, such as large language models and AI image generators by companies like OpenAI, as well as scientific advances, such as protein folding prediction led by Google DeepMind. This period is sometimes referred to as an AI spring, to contrast it with previous AI winters. [3] [4]

Speculation about a bubble

In late January 2025, after the unexpectedly successful launch of the Chinese-made chatbot DeepSeek, the stock prices of many AI companies dropped, such as Nvidia's stock price dropping 8.8% in one day, resulting in concerns about a possible AI bubble. The stock market soon recovered, however. [5] [6]

In August 2025, a report by the Massachusetts Institute of Technology stated "despite US$30-40bn in enterprise investment into Gen[erative]AI, [...] 95% of organisations are getting zero return". [7] This caused concerns about a potential AI bubble and within days the stock market dropped by a few percentage points, a drop of $1 trillion. [8] [7] The report found however that the lack of returns was not caused by the AI models being incapable, but instead by the companies not using them effectively. [7]

Sam Altman, CEO of OpenAI and a leading figure of the AI boom, stated in 2025 that he believes that an AI bubble is ongoing. He has however stated that he believes, similarly to the dot-com bubble, "investors as a whole are overexcited about AI" but also that "AI the most important thing to happen in a very long time". [9]

In early 2025, Bridgewater Associates co-investment officer Ray Dalio said that the current levels of investment in AI is "very similar" to the dot-com bubble. [9]

See also

References

  1. ↑ Knight, Will. "Google's Gemini Is the Real Start of the Generative AI Boom". Wired. Retrieved 12 December 2023.
  2. ↑ Meredith, Sam (6 December 2023). "A 'thirsty' generative AI boom poses a growing problem for Big Tech". CNBC. Retrieved 12 December 2023.
  3. ↑ Bommasani, Rishi (17 March 2023). "AI Spring? Four Takeaways from Major Releases in Foundation Models". Stanford Institute for Human-Centered Artificial Intelligence. Archived from the original on 7 May 2023. Retrieved 16 May 2023.
  4. ↑ "The coming of AI Spring". www.mckinsey.com. Retrieved 7 December 2023.
  5. ↑ Butts, Dylan (18 August 2025). "OpenAI's Sam Altman sees AI bubble forming as industry spending surges". CNBC. Retrieved 26 August 2025.
  6. ↑ "Nvidia and Microsoft shares steady after DeepSeek AI app shock". www.bbc.com. 28 January 2025. Retrieved 26 August 2025.
  7. 1 2 3 Kahn, Jeremy. "An MIT report that 95% of AI pilots fail spooked investors. But it's the reason why those pilots failed that should make the C-suite anxious". Fortune. Retrieved 26 August 2025.
  8. ↑ "US tech stocks lose $1tn on AI bubble fears". The Telegraph. 20 August 2025. Retrieved 26 August 2025.
  9. 1 2 "Wall Street isn't worried about an AI bubble. Sam Altman is". Fortune . 19 August 2025. Retrieved 26 August 2025.
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