Global markets are on high alert for signs that demand for artificial intelligence is waning, or that massive investments are not yielding expected returns. While AI investments have reshaped global technology and concentrated market focus on major companies, they also carry the risk of creating a financial bubble. Industry leaders and financial experts are divided on whether we are in an AI bubble and whether the bubble can lead to a market correction.
Adecco CEO Denis Machuel noted a disconnect between the supply of AI and its integration into core business processes. OpenAI CEO Sam Altman acknowledged investor overexcitement, predicting significant gains and losses for different players. Michael Burry, known from “The Big Short”, has placed bearish bets on Nvidia and Palantir, warning of a bubble. SK Hynix Chairman Chey Tae-won stated that while he doesn’t see a bubble in the AI industry, stock markets have risen too fast, making corrections natural.
The Bank of England issued a warning of a potential AI-triggered market slump, saying the risk of a sharp market correction has increased. However, not all experts agree. Nvidia CEO Jensen Huang said the cloud companies’ demand for his firm’s chips shows that there is no bubble. UBS equity strategists reported that the majority of investors believe that we are in an AI bubble, but 90% of them said that they are still invested in many of the AI-related areas.
