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Do you think, we are heading for, or maybe already, in an AI-bubble?
The artificial intelligence boom has powered markets and redrawn the tech landscape.
Yet behind the optimism, concerns are growing about whether every company riding the wave can live up to its price tag.
Bill Gates, the Microsoft cofounder, has warned that intense competition will leave some investors disappointed.
Valuations under strain
Speaking to CNBC in December, during Abu Dhabi Finance Week, Gates described today’s AI market as “hypercompetitive”.
“Not all of these valuations will end up going up. Some of them will go down,” he said, according to CNBC, although he added that he believed it would be a small percentage of the companies.
His comments came as the largest technology groups, often called hyperscalers, continue to pour money into artificial intelligence. According to Investopedia, Microsoft, Alphabet, Amazon, Meta Platforms, and Oracle collectively spent about $400 billion on infrastructure in 2025 and are expected to increase that total sharply in 2026.
Speculation concerns
The scale of that spending has fueled worries that enthusiasm has tipped into speculation.
AI-driven gains have underpinned much of the stock market rally over the past three years, but periods of volatility have emerged as investors questioned whether prices were getting ahead of fundamentals.
Some high-profile companies illustrate those fears. Palantir trades at a price-to-earnings ratio close to 400, one of the highest in the S&P 500.
Broadcom and Advanced Micro Devices have also surged on hopes they can challenge Nvidia’s dominance in AI chips, pushing their valuations far above the market average.
Sources: CNBC, Investopedia
