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| Artificial intelligence (AI) |
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The AI bubble is a theorised ongoing stock market bubble, similar to the Dot-com bubble, occurring during the AI boom, an ongoing period of rapid progression in artificial intelligence (AI) which has impacted the broader economy. [1] [2] [3]
In late January 2025, the unexpectedly successful launch of the Chinese-made chatbot DeepSeek resulted in concerns about a possible AI bubble. The stock prices of many AI companies dropped, such as Nvidia's shares dropping 17% in one day. Nvidia's share price recovered 8.8% the following day. [11] 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". [12] Spending from US mega caps is expected to reach $1.1 trillion between 2026 and 2029, and total AI spending is expected to surpass $1.6 trillion. [13]
Sam Altman, CEO of OpenAI and creator of ChatGPT stated in 2025 that he believed that an AI bubble is ongoing. [17] 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. [17]
In September 2025, the Australian Financial Review said that "If we really are in another share-market bubble, it's surely the most anticipated example in history." [18] In October of that year, Jamie Dimon said he thinks "AI is real" but said he believes some money invested now will be wasted. He also said there is a higher chance of a meaningful drop in stocks over the following two years than the market was reflecting. [19]
The Bank of England warned of the growing risks of a global market correction due to a possible overvaluation of leading AI tech firms in the stock market, such as OpenAI which more than tripled its value from $157 billion in October 2024 to $500 billion the following year. These valuations, they claimed, could be further harmed if the infrastructure requirements for sustaining the technology were too high to be met. They added that investors were not properly cautioned with the risks of a stock market crash were AI to fall short of market expectations. [20] 30% of the US S&P 500 was solely held up by the 5 largest companies, which was the greatest concentration in half a century, and share valuations were reportedly the most stretched since the dot-com bubble.
The International Monetary Fund agreed with and reinforced the bank’s claims. Kristalina Giorgieva, a Bulgarian economist and the head of the IMF, also drew comparisons to the dot-com bubble of 2001, highlighting that a market correction could stunt global growth and weaken the economies of developing countries. [21]
A Goldman Sachs chief equity strategist believes the rapid increase in stock valuations are likely justified by powerful and sustained profit growth. Goldman also noted that valuations for the large US growth stocks that led the market higher in the bull market since October 2022 are modest compared to the dot-com bubble. [22]
Morgan Stanley pointed out that the median cash flow for the top 500 companies in the US is roughly triple what it was in 1999 and that firms margin profiles are much more robust now. [23] [24]