【Text by Observers Network, Yuan Jiaqi】
"Everything is just a bubble, a fleeting spark of flowers..." For the American Silicon Valley, which is increasingly anxious about the artificial intelligence (AI) bubble bursting, "bubble" has recently become a taboo word that people are afraid to talk about.
Currently, the AI boom is pushing global stock market valuations to levels similar to those during the peak of the Internet bubble in 2000. According to the British Broadcasting Corporation (BBC), on the 11th, in this capital frenzy, the debate over whether the value of AI companies is seriously overestimated has become more urgent, and the sense of worry has continued to rise.
In recent days, more and more people have brought their previously private doubts to the surface: This week, the Bank of England, the International Monetary Fund (IMF), the World Bank, and other important international institutions and investment banks have all spoken out, warning of the risk of bubble in the AI capital boom, and reminding the market of the rising risk of a sharp adjustment. Media analysis said that the statements from the IMF and the Bank of England are the most explicit warnings from global official institutions regarding the possible collapse of the market bubble led by AI.
This week, at a special discussion session held at the Computer History Museum in Silicon Valley, facing an audience that was completely full, Jerry Kaplan, known as the "father of the tablet computer" and a pioneer in the commercialization of AI at Stanford University, also expressed his concerns.
As someone who has experienced four technology bubbles, he pointed out that the current amount of funding invested in the AI field far exceeds that during the Internet bubble period. If the bubble bursts, the losses will be immeasurable.
"When the bubble bursts, things will get very bad, and it won't just affect the AI sector," Kaplan said seriously. "It will drag down the entire economy."
At the Stanford University Graduate School of Business, which has nurtured many tech entrepreneurs, Professor Anat Admati said, "It's difficult to accurately predict when the bubble will burst. Moreover, no one can be sure they are in a bubble before it bursts."
A series of data have also raised concerns: 80% of the astonishing stock market gains in the United States this year come from AI-related companies. According to market consulting company Gartner, by the end of 2025, global AI spending could reach a staggering $1.5 trillion.
The Guardian analyzed that in the past week, the messages from global regulatory agencies have been direct: the AI boom is driving the stock market to the peak of the Internet bubble. So much money is being bet on so few companies, and any loss of confidence could lead to a sharp drop in stock prices and drag down the overall economy.
"Most people should be more aware of the current uncertainty," Jamie Dimon, CEO of JPMorgan Chase, reminded on a BBC podcast this week.
The screen at the headquarters of the Nasdaq in the United States displays AI investment data. Visual China
OpenAI's Trillion-Dollar "Bet"
According to the BBC, OpenAI, which pushed AI into the consumer mainstream in 2022 with ChatGPT, is at the center of a series of controversial complex transactions. According to reports from Bloomberg, as a private company, OpenAI's recent valuation has soared to an astonishing $500 billion, surpassing Elon Musk's SpaceX to become the world's largest startup.
So far, OpenAI has reached infrastructure and chip agreements worth over $1 trillion with giants such as NVIDIA, AMD, Oracle, and SoftBank.
In a landmark agreement last month, NVIDIA agreed to invest up to $100 billion in OpenAI, and both parties plan to build data centers driven by NVIDIA's advanced chips; Oracle signed a $300 billion cloud service agreement to support OpenAI's computing load; AMD also granted OpenAI options to purchase its next-generation AI chips, worth up to 10% of its own shares, in exchange for OpenAI purchasing and co-developing AMD's next-generation AI chips.
These complex financing arrangements are causing concern among Silicon Valley experts. They point out that the increasing prevalence of such transactions may distort external judgments of the real demand for AI.
Some people have even criticized these partnerships, calling them "supplier financing" or "circular financing," where companies invest in and lend to customers to ensure continued purchases of their products.
NVIDIA's investment has faced such criticism: as OpenAI deploys NVIDIA GPUs on a large scale, most of the investment funds will eventually flow back to NVIDIA; and the agreement with AMD may also make OpenAI one of its largest shareholders.
At the OpenAI Developer Conference on Monday, CEO Sam Altman tried to appear open. He admitted, "Indeed, the scale of these loans and investments is unprecedented." However, he also defended, "The speed of our revenue growth is also unprecedented."
Although revenue growth is rapid, OpenAI has never achieved profitability. The BBC reported that this situation has caused many respondents to recall Nortel Networks: this Canadian telecommunications equipment manufacturer once financed its customers through extensive lending, artificially boosting demand for its products, ultimately leading to decline. People lamented, "The current phenomena are remarkably similar to those of the past," stating that this is certainly not a "good sign."
Altman did not avoid the topic of "bubble" at the conference on Monday, "I know, writing an article about 'bubble' is tempting. In fact, I think many areas of AI do indeed have a bubble right now."
He predicted that investors would make some wrong decisions, and some unreliable startups would receive absurd financing. But he emphasized that OpenAI is not on the list of concerns.
Sam Altman speaking at the OpenAI Developer Conference. Screenshot from video
American Stock Market Boss: The Situation Might Be Worse Than in 1999
On the same day, Jensen Huang, CEO of NVIDIA, tried to defend the transaction with OpenAI. He said in an interview with U.S. media that OpenAI does not need to use NVIDIA's investment to purchase its technology, "They can use it to do anything they want, without any exclusivity. Our main goal is to support them."
On Wednesday, Huang also said that the current AI boom is fundamentally different from the Internet bubble 25 years ago because today's large technology companies, such as Microsoft, Google, and Meta, are much stronger than the companies during the bubble era.
CEO of AMD, Lisa Su, also expressed a different view on the issue of "overheated AI investment." She believed that those who hold this view have a "narrow perspective" and emphasized that the true potential of this technology to change the world should be recognized, especially in fields such as healthcare, finance, and research.
The Independent analyzed that technology giants are trying to maintain a calm attitude, claiming that even if a crash actually occurs, the situation this time will be different. Their core argument is that although the development of the AI field depends on borrowed financing, the current debt level compared to the uncontrollable surge before the 2000 Internet bubble is not high in proportion.
However, the warnings from Wall Street bigwigs like Paul Tudor Jones, a hedge fund manager and billionaire, seem louder.
He bluntly stated, "All the elements that cause a crisis are in place, and a sudden risk could happen at any time. History always repeats itself, so I think such situations are likely to happen again. If there is any difference, it's that the potential for a sudden outbreak in the current situation is much greater than in 1999."
Kaplan also mentioned in the previous special seminar that he has observed several clear signals indicating that the AI field and even the entire economy may face a crisis.
He pointed out that during periods of market euphoria, companies often announce major plans and product proposals that lack sufficient funding, and retail investors rush into the startup field.
According to a report from Fortune magazine on the 7th, a study by Harvard economist Jason Furman found that the growth of the U.S. gross domestic product (GDP) in the first half of 2025 is almost entirely driven by data centers and information processing technologies. In other areas outside of these technologies, the U.S. growth rate is only 0.1%, almost stagnant.
Furman added that without the prosperity of the AI industry, the U.S. might lower interest rates and electricity prices, thus promoting growth in other industries, but this growth may only be about half of the gains brought by the AI boom.
Furman's research shows that investment in information processing equipment and software in the United States has surged, but economic growth in other areas is almost stagnant
Many people are worried that without technological investment, the U.S. economy may fall into a recession. The website "Business Insider" in the United States also published an article saying that U.S. tech giants continue to raise funds to expand data centers, but this business model has not been verified, and it is unclear whether the revenue from AI products can support the rising costs. If not, the U.S. economy may face risks such as a stock market crash.
Deutsche Bank's recent research report also shows that the AI boom is helping the U.S. economy avoid a recession, but this situation cannot continue indefinitely.
George Saravelos, the global foreign exchange research chief at Deutsche Bank, bluntly stated that without the massive investment of large technology companies in building new AI data centers, the U.S. would be "close to an economic recession" this year.
Data compiled by Bloomberg show that in the past 12 months, excluding Tesla, the total capital expenditure of the seven major U.S. tech giants reached $309 billion. Most of this money was used for AI construction.
Scott Wren, senior global market strategist at Wells Fargo Investment Institute, warned, "In the coming years, not only a few large companies need to convert their AI investments into actual profits. For many companies, AI is still a cost rather than a source of income. It may not be a big problem now, but problems will eventually arise in the future."
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