AI bubble

The AI bubble is a theorised ongoing stock market bubble, occurring during the AI boom, an ongoing period of rapid progression in artificial intelligence (AI) which has impacted the broader economy.^[1][2][3]

Background

This paragraph is an excerpt from AI boom.[edit]

The AI boom^[4][5] is an ongoing period of technological progress in the field of artificial intelligence (AI) that started in the late 2010s before gaining international prominence in the 2020s. Examples include generative AI technologies, such as large language models and AI image generators by companies like OpenAI, as well as scientific advances, such as protein folding prediction led by Google DeepMind. This period is sometimes referred to as an AI spring, to contrast it with previous AI winters.^[6][7] As of 2025, ChatGPT is the 5th most visited website globally behind Google, YouTube, Facebook, and Instagram.^[8][9]

Speculation about a bubble

The number of Google searches for the term "AI" accelerated.

In late January 2025, the unexpectedly successful launch of the Chinese-made chatbot DeepSeek resulted in concerns about a possible AI bubble. The stock prices of many AI companies dropped, such as Nvidia's shares dropping 17% in one day. Nvidia's share price recovered 8.8% the following day.^[10] In August 2025, a report by the Massachusetts Institute of Technology stated "despite US$30-40bn in enterprise investment into Gen[erative]AI, [...] 95% of organisations are getting zero return".^[11] Spending from US mega caps is expected to reach $1.1 trillion between 2026 and 2029, and total AI spending is expected to surpass $1.6 trillion.^[12]

Sam Altman, CEO of OpenAI and creator of ChatGPT stated in 2025 that he believed that an AI bubble is ongoing.^[13] In early 2025, Bridgewater Associates co-investment officer Ray Dalio said that the current levels of investment in AI is "very similar" to the dot-com bubble.^[13]

In September 2025, the Australian Financial Review said that "If we really are in another share-market bubble, it’s surely the most anticipated example in history."^[14] In October of that year, Jamie Dimon said he thinks "AI is real" but said he believes some money invested now will be wasted. He also said there is a higher chance of a meaningful drop in stocks over the following two years than the market was reflecting.^[15]

Opposing views

A Goldman Sachs chief equity strategist believes the rapid increase in stock valuations are likely justified by powerful and sustained profit growth. Goldman also noted that valuations for the large US growth stocks that led the market higher in the bull market since October 2022 are modest compared to the dot-com bubble.^[16]

Morgan Stanley pointed out that the median cash flow for the top 500 companies in the US is roughly triple what it was in 1999 and that firms margin profiles are much more robust now.^[17][18]

See also

• Cryptocurrency bubble – Speculative bubble involving cryptocurrency prices
• Dot-com bubble – Tech stock speculative craze, c. 1997–2003Pages displaying short descriptions of redirect targets
• AI boom – Ongoing period of rapid progress in AI