The Verge reported on Friday that OpenAI CEO Sam Altman believes the artificial intelligence sector is in a bubble.
Altman told a small group of reporters last week that bubbles occur when smart individuals become too enthused about a grain of truth.
“Do investors in general seem overly enthusiastic about AI at this point in time? I think so. Is AI the most significant development in a very long time? In my view, he was quoted as replying, “Yes.”
Altman seemed to draw a comparison between this dynamic and the notorious dot-com bubble, which was a stock market meltdown that struck internet-based businesses in the late 1990s and caused a great deal of investor fervor. Many of these firms failed to make money, and the Nasdaq lost about 80% of its value between March 2000 and October 2002.
His remarks fuel more worries among analysts and professionals that AI investment is accelerating too quickly. Torsten Slok, chief economist at Apollo Global Management, Ray Dalio of Bridgewater Associates, and Joe Tsai, a co-founder of Alibaba, have all issued similar cautions.
With the top 10 businesses in the S&P 500 more overvalued than they were in the 1990s, Slok said in a study last month that he thought the AI bubble of today was actually larger than the internet bubble.
According to Ray Wang, research director for semiconductors, supply chain, and emerging technologies at Futurum Group, Altman’s remarks have some merit, but the dangers vary depending on the firm.
From the standpoint of more extensive investment in semiconductors and AI, he doubt it’s a bubble. He stated that the supply chain’s fundamentals are still sound and that more investment is encouraged by the AI trend’s long-term direction.
However, he noted that a growing number of speculative funds are pursuing businesses with merely perceived promise and inferior fundamentals, which may lead to overvaluation in some areas.
At the beginning of this year, when Chinese start-up DeepSeek unveiled a competitive reasoning model, many concerns about an AI bubble reached a fever pitch. Though some doubt was raised, the business stated that one of its sophisticated large language models had been trained for less than $6 million, which is a small portion of the billions being spent by U.S. AI industry leaders like OpenAI.
OpenAI is expected to surpass $20 billion in recurring income this year, Altman told earlier this month, although the company is still not profitable.
Earlier this month, OpenAI’s most recent GPT-5 AI model was released, but it was met with criticism for lacking intuitiveness. As a consequence, paying users were able to access older GPT-4 models again.
Since the model’s introduction, Altman has also shown more hesitancy regarding some of the more optimistic forecasts made by the AI sector.
When asked if the GPT-5 model brings the world closer to reaching AGI, he told that the term artificial general intelligence, or “AGI,” is losing relevance.
It had disclosed a $40 billion investment round in March, valued at $300 billion, which was by far the most money ever raised by a private tech company.
In a piece published on Friday, the CEO of OpenAI also talked about the company’s foray into social media, brain-computer interfaces, and consumer electronics.
In addition, Altman stated that he anticipates OpenAI will invest trillions of dollars in the expansion of its data center in the “not very distant future,” and he hinted that the business might be open to purchasing Chrome in the event that the US government compelled Google to sell it.
“I mean, maybe an AI is in three years,” he was reported as saying when asked if he would be the CEO of OpenAI in a few years. That’s a lengthy period.
