Is AI a bubble? What the experts say

Warning8 Oct 2025

Bank of England (Financial Policy Committee)

“US equities, especially AI-focused tech, look stretched; the risk of a sharp correction has increased”

On some measures US valuations are close to the dot-com peak. If sentiment on AI sours, or progress stalls on technical or supply bottlenecks, prices could fall hard, and with markets this concentrated the fall would spread across the indices.

DATAOn this site: the largest chip company is worth 17.0% of US GDP (Cisco at the 2000 peak: 5.5%); 0 of 5 warning signs lit.

AFTERTo 28 Sep 2026: Nasdaq +16%, NVIDIA +21%.

Source: Bank of England, Record of the Financial Policy Committee (October 2025)

Warning14 Oct 2025

IMF

“A shift in expectations about AI could trigger a sharp repricing of assets”

Global Financial Stability Report (October 2025). Valuation models put risk assets well above fundamentals. Investors see AI lifting profit margins, and that view could change.

DATAOn this site: the largest chip company is worth 17.0% of US GDP (Cisco at the 2000 peak: 5.5%); 0 of 5 warning signs lit.

AFTERTo 28 Sep 2026: Nasdaq +19%, NVIDIA +27%.

Source: IMF, Global Financial Stability Report (October 2025)

Warning29 Jun 2026

BIS (the central banks' bank)

“Big-tech AI spending is outrunning earnings; disappointment could turn the boom into a protracted bust”

Annual Economic Report 2026. The five biggest hyperscalers will spend over $1 trillion on AI across 2025–26, more than their earnings and free cash flow, with some borrowing the gap. It likens the boom to the canal mania of the 1830s, Britain's railway mania of the 1840s and the dot-com era, all of which ended with investment reversing and a recession.

DATAOn this site: big-five capex is 83% of operating cash flow over the last four quarters; the 'spending beyond earnings' sign is off.

AFTERTo 28 Sep 2026: Nasdaq +4%, NVIDIA +17%.

Source: BIS Annual Economic Report 2026 (Fortune, June 2026)

Warning15 May 2024

Daron Acemoglu (MIT, 2024 Nobel laureate in economics)

“AI will add less than 0.7% to productivity over the next ten years”

Built up from the share of tasks AI can take over and how much it cuts their cost: no more than a 0.66% gain in total factor productivity over ten years, under 0.53% once harder tasks are allowed for. A challenge to forecasts that assume a large payoff.

AFTERTo 28 Sep 2026: Nasdaq +60%, NVIDIA +142%.

Source: The Simple Macroeconomics of AI (NBER, May 2024)

Warning20 Jun 2024

Sequoia Capital (David Cahn)

“Recouping the AI build-out needs $600 billion of revenue a year”

NVIDIA's projected data-centre revenue, doubled for the full cost of running it and doubled again for a 50% gross margin for its users. The figure was $200 billion in September 2023 and tripled as spending grew. The gap with actual AI revenue is the question.

AFTERTo 28 Sep 2026: Nasdaq +51%, NVIDIA +75%.

Source: AI's $600B Question (Sequoia Capital, June 2024)

Warning18 Aug 2025

MIT NANDA (The GenAI Divide)

“95% of companies' generative AI pilots show no measurable effect on profit”

Companies have spent $30–40 billion on generative AI, yet only 5% see results. Based on 300+ public initiatives, 52 interviews and 153 survey responses. The problem is how companies adopt it, not the models.

AFTERTo 28 Sep 2026: Nasdaq +24%, NVIDIA +26%.

Source: 95% of generative AI pilots show no return: MIT report (The Register, Aug 2025)

Not a bubble8 Oct 2025

Goldman Sachs (Peter Oppenheimer and others)

“Tech stocks are not in a bubble, yet”

The rally rests on earnings growth, not hope: global tech earnings per share are about five times their pre-crisis peak, against 1.25 times for everything else. Valuation relative to growth is in line with other sectors and far below the late 1990s. Concentration and rich private valuations are the risks.

DATAOn this site: the largest chip company is worth 17.0% of US GDP (Cisco at the 2000 peak: 5.5%); 0 of 5 warning signs lit.

AFTERTo 28 Sep 2026: Nasdaq +16%, NVIDIA +21%.

Source: Goldman Sachs: not in an AI bubble, yet (Axios, Oct 2025)

Warning10 Nov 2025

Michael Burry (of The Big Short)

“The hyperscalers are flattering profits by stretching the useful lives of their servers”

NVIDIA chips turn over every two to three years, yet the big clouds depreciate them over five or six. He estimates $176 billion of understated costs in 2026–28, with Oracle's 2028 earnings overstated by about 27% and Meta's by about 21%.

AFTERTo 28 Sep 2026: Nasdaq +14%, NVIDIA +15%.

Source: Burry says Oracle and Meta overstate earnings (Benzinga, Nov 2025)

Mixed9 Dec 2025

Howard Marks (Oaktree Capital)

“No one can know whether it is a bubble; stay moderate and selective”

AI stocks account for 75% of the S&P 500's gains, 80% of its earnings growth and 90% of its capex. He separates bubbles that just rise and fall from 'inflection bubbles' that push progress forward, and sees some of the latter in AI, while flagging huge valuations for firms without products and circular deals.

DATAOn this site: big-five capex is 83% of operating cash flow over the last four quarters; the 'spending beyond earnings' sign is off.

AFTERTo 28 Sep 2026: Nasdaq +14%, NVIDIA +24%.

Source: Is It a Bubble? (Oaktree, Dec 2025)

Mixed17 Sep 2026

Goldman Sachs (Peter Oppenheimer)

“No valuation bubble, but perhaps an earnings bubble”

A view first set out in August 2026, backed with numbers in September: capex at AA-rated tech firms rose 65% year on year in the second quarter, and US convertible issuance reached $135 billion so far this year, 44% of it AI-related. AI spending and government borrowing are competing for the same capital; slower profit growth with a higher cost of capital could push shares down.

DATAOn this site: big-five capex is 83% of operating cash flow over the last four quarters; the 'spending beyond earnings' sign is off.

AFTERTo 28 Sep 2026: Nasdaq +2%, NVIDIA +4%.

Source: Goldman adds numbers to its earnings-bubble warning (Fortune, Sep 2026)

Mixed14 Aug 2025

Sam Altman (OpenAI)

“Investors are overexcited about AI, and someone will lose a phenomenal amount of money”

Asked at a dinner with reporters whether investors are overexcited, he said yes, comparing it with the late-1990s internet: 'When bubbles happen, smart people get overexcited about a kernel of truth.' He still expects a huge net win, and said OpenAI will spend trillions on data centres.

AFTERTo 28 Sep 2026: Nasdaq +24%, NVIDIA +26%.

Source: Altman warns the AI market is in a bubble (CNBC, Aug 2025)

Mixed3 Oct 2025

Jeff Bezos (Amazon founder)

“This is an industrial bubble; even if it pops, society keeps gigantic benefits”

Unlike financial or housing bubbles, an industrial bubble leaves technology and infrastructure behind. In a bubble good and bad ideas both get funded and investors cannot tell them apart; he cited the 1990s biotech bubble, which still produced life-saving drugs.

AFTERTo 28 Sep 2026: Nasdaq +18%, NVIDIA +22%.

Source: Bezos: AI is in an industrial bubble (CNBC, Oct 2025)

Not a bubble19 Nov 2025

Jensen Huang (NVIDIA)

“There's a lot of talk about an AI bubble; from our vantage point we see something very different”

On the earnings call: three platform shifts are happening at once, from general-purpose to accelerated computing, from classical machine learning to generative AI, and on to agentic AI, so demand reflects a real rebuild of computing rather than speculation.

DATAOn this site: the largest chip company is worth 17.0% of US GDP (Cisco at the 2000 peak: 5.5%); 0 of 5 warning signs lit.

AFTERTo 28 Sep 2026: Nasdaq +19%, NVIDIA +23%.

Source: Huang rejects AI bubble talk (CNBC, Nov 2025)