Sam Altman warns AI market may be a bubble

OpenAI CEO Sam Altman thinks the AI market is in a bubble, comparing investor excitement to the dot-com boom of the late 1990s.

He said investors may be “overexcited” about the technology.

Other leaders, including Alibaba co-founder Joe Tsai, Bridgewater’s Ray Dalio, and Apollo’s Torsten Slok, have also warned about possible overvaluation.

Slok recently said the current AI bubble may be even bigger than the internet bubble, pointing to high valuations among top S&P 500 companies.

But Ray Wang of Constellation Research told CNBC that while there are speculative pockets, he does not see the whole sector as a bubble.

The remarks come as OpenAI launched its GPT-5 model and restored GPT-4o access for paying customers.

The company is also preparing a secondary stock sale that could value it at around US$500 billion.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ Current AI valuations show unprecedented speed and scale compared to historical tech bubbles

The AI market has created 498 unicorn companies worth a combined $2.7 trillion, with 100 of these founded since 2023 alone 1.

This represents an extraordinary concentration of value creation in just two years, suggesting investor enthusiasm that rivals or exceeds historical precedents.

For comparison, during the dot-com bubble, companies like Priceline saw their stock price jump from $16 to $88 on their first trading day despite operating at losses 2.

Today’s AI market shows similar patterns of high valuations despite profitability challenges—OpenAI expects $20 billion in annual revenue but remains unprofitable, even as investors prepare to value the company at $500 billion.

The speed of wealth creation particularly stands out, with AI startups like Thinking Machines Lab raising $2 billion at a $12 billion valuation despite lacking a defined product 3.