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he world’s most powerful tech leaders can’t agree on a crucial question: Is artificial intelligence driving a genuine economic transformation—or an asset bubble waiting to burst?
The world’s most powerful tech leaders can’t agree on a crucial question: Is artificial intelligence driving a genuine economic transformation—or an asset bubble waiting to burst? Nvidia CEO Jensen Huang rejects the bubble narrative outright. Amazon founder Jeff Bezos says one clearly exists. OpenAI’s Sam Altman has warned investors may “lose a lot of money.”
That divide now sits at the center of a stock market that has become almost entirely dependent on AI’s promise—and increasingly vulnerable if the reality doesn’t match the hype.
A market built on seven stocks
Since the current bull market began in October 2022, roughly 75% of the S&P 500’s gains have come from the Magnificent Seven: Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia and Tesla. By mid-November, their combined value reached $21.5 trillion, an astonishing concentration of wealth in a handful of companies.
The S&P 500 has climbed 14.7% this year, repeatedly hitting record highs. Yet 40% of the index’s value comes from its 10 largest stocks, almost all of them tech giants pouring unprecedented sums into AI data centers, chips and generative-AI models.
These investments have pushed global AI capital spending to new extremes. Goldman Sachs estimates AI capex will reach $390 billion this year, rising nearly 20% in 2026. Bank of America forecasts $1.2 trillion in AI capex by 2030.
The catch?
AI revenues are nowhere near those levels.
When capex outpaces reality
A recent Morgan Stanley note described the AI ecosystem as “increasingly circular,” with companies such as OpenAI, Nvidia, Oracle, Microsoft, CoreWeave and AMD investing in one another while simultaneously acting as customers and suppliers. The report cited billions of dollars moving around this small cluster of firms through equity stakes, revenue-sharing agreements, vendor financing and repurchase deals.
Meanwhile, the revenue base remains thin. OpenAI disclosed $13 billion in 2025 revenue. Altman recently suggested revenues could reach $100 billion by 2027, yet the company has committed $1.4 trillion to product development. Microsoft revealed OpenAI may have lost $12 billion in just one quarter.
“Can the 10 AI companies generate enough revenue to justify the capex?” asked Torsten Sløk, chief economist at Apollo Global Management. It’s the question now hanging over global markets.
Small-caps join the frenzy
The AI boom isn’t confined to the giants. Nearly 40% of companies in the Russell 2000—an index of small-cap stocks—earned no profit this year. Counterintuitively, those unprofitable companies have outperformed profitable ones, fueled by speculative bets on AI’s future.
If AI spending slows or investor sentiment turns, the shockwaves would hit both ends of the market: mega-caps that dominate global portfolios and early-stage companies riding the hype.
The world is tied to U.S. tech—and more exposed than ever
The stakes are global. U.S. equities now make up about 60% of all stock-market value worldwide. Of that, technology stocks represent roughly 45%, worth more than $26 trillion.
Christian Mueller-Glissmann of Goldman Sachs described the global financial system as an “upside-down pyramid”:
- At the top, U.S. equities.
- Beneath them, the Magnificent Seven.
- Beneath those, about 10 private AI companies—largely unprofitable—on which the entire structure increasingly depends.
“The world portfolio is getting more and more important for the global economy,” he said. If U.S. tech stocks are in a bubble, “the whole world is in a bubble.”
A fragile moment approaches
Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, warned that AI optimism has masked a steady stream of concerning economic data. Factors that once supported U.S. markets—near-zero interest rates, massive pandemic-era stimulus and decades of globalization—are fading.
She argues that American outperformance is likely to unwind in a “great rebalancing” over the next five to 10 years, with implications far beyond AI firms.
“People realize that there’s only so much of this story that you can price into the future without the ‘Show me the money’ moment,” Shalett told Fortune. “We think we’re pretty close to the moon already.”
The next 12 months
Major banks—including Goldman Sachs, J.P. Morgan, Apollo and Bank of America—expect AI capex to keep rising through at least 2026. The bubble, if it is one, may still have room to inflate.
But at some point, revenues will have to justify the trillions pouring into AI infrastructure. If they don’t, the correction could be global—and severe.
As Shalett put it: when the tide goes out, investors will want to know “who has a viable business and who is swimming naked.”
Sources: Fortune, Nvidia, Morgan Stanley
