Asger Risom
Talk of a coming “AI bubble” is getting louder across Wall Street and Silicon Valley.
Talk of a coming “AI bubble” is getting louder across Wall Street and Silicon Valley. But the debate itself is starting to take on the same qualities as the market cycle it’s trying to predict: fast-growing, emotionally charged, and unlikely to fade anytime soon.
Familiar voices return to the warning signs
This week brought several new flashpoints in the conversation, including yet another alarm from Michael Burry, the investor who predicted the 2008 housing crash. Burry questioned whether major tech companies are properly accounting for the short lifespan of the chips powering their AI systems, arguing that hyperscalers could be understating depreciation by tens of billions of dollars.
JPMorgan analysts added their own caution, drawing a comparison to the late-1990s dot-com era, when telecoms poured money into fiber-optic networks long before the revenue to justify them had arrived.
SoftBank reshuffles its AI bets
The debate intensified further when SoftBank revealed it had sold its entire $5.8 billion stake in Nvidia. Rather than backing away from AI, however, SoftBank is shifting its firepower. The firm plans to direct more money toward OpenAI after already committing $30 billion to support Sam Altman’s ambitions.
The move revived memories of earlier tech cycles, raising questions about how sustainable this wave of investment will be.
Trillions are already committed, and unlikely to unwind
Despite the doubts, there’s little sign of a slowdown. Big Tech executives have continued to defend aggressive spending on data centers and AI infrastructure, even as analysts press them on long-term profitability.
With trillions of dollars already earmarked for AI development and much of the stock market’s momentum riding on that growth, a quick reversal is unlikely. Many investors expect the industry’s biggest bets will take years to produce returns, and none of the major players appear eager to scale back.
A debate that fuels itself
The argument around AI’s future — and whether the sector is overinflated — now has its own momentum. Supporters and skeptics alike seem energized by the clash, as shown by Burry’s recent public back-and-forth with Palantir CEO Alex Karp.
For now, the AI bubble debate isn’t close to bursting. It’s only growing.
Sources: Business Insider
