① Both AI company executives and Wall Street have issued warnings, believing that artificial intelligence... The sector faces bubble risks, with valuations being too high and revenue and profit prospects uncertain; ② The technology industry is optimistic about the long-term potential of artificial intelligence , but acknowledges the risk of a financial bubble. While corporate demand for AI is growing, adoption still faces challenges.
Today, it's not just Wall Street that's issuing warnings about an artificial intelligence (AI) bubble; even AI company executives are admitting they're worried a bubble is forming in the AI sector. This highlights the growing concern within the industry about soaring valuations.
Recently, the market has been considering the view that too much capital has flowed into the artificial intelligence boom, leading to uncertainty about revenue and actual profit prospects, and thus questioning the high valuations.
In fact, so far, most warnings about overvaluation have come from investors and financial leaders. Goldman Sachs CEO David Solomon and Morgan Stanley CEO Ted Pick warned that a correction is possible as some major tech companies' valuations reach all-time highs.
However, at the Web Summit technology conference in Lisbon this week, CEOs of companies developing their own artificial intelligence expressed similar concerns. Jarek Kutylowski, CEO of the German AI company DeepL, stated in an interview: "I think these assessments are exaggerated in some places, and I think there are signs that a bubble is about to form. "
Picsart CEO Hovhannes Avoyan echoed this sentiment, noting that "we see many AI companies with very high valuations despite having no revenue," adding that this is a "worrying issue."
He stated that the market values small startups that "only generate some noise and atmosphere revenue." He was referring to companies that can secure investment even with low sales.
AI demand is growing.
Despite concerns about valuations, the tech industry remains optimistic about the long-term potential of artificial intelligence. Lyft CEO David Risher stated that there are reasons to be optimistic given the potential impact of AI, but also acknowledged the risks involved.
“ Let’s be clear, we are absolutely in a financial bubble. That’s fine, right? Because it’s an incredible, revolutionary technology. Nobody wants to be left behind,” he said.
Risher went on to point out that there is a difference between financial bubbles and industrial prospects.
Data Center And all the models created, all of these will have very long lifecycles because they are transformative. They make people's lives easier and better... On the other hand, you know, from a financial perspective, there are currently some risks," he added.
The tech CEOs also discussed their outlook on enterprise demand for AI in 2026. Kutylowski acknowledged that "there is a lot of demand and a lot of interest right now," but he also emphasized that businesses are still "struggling to adopt" artificial intelligence.
“We will make greater progress, but I don’t think we will reach the point where every business and every organization has complete mastery of artificial intelligence,” he added.
huge expenditures
Despite concerns about overvaluation and massive capital expenditures, investment in artificial intelligence does not appear to be slowing down. A report released this week by venture capital firm Accel predicts that the capacity of newly built AI data centers will reach 117 gigawatts by 2030, which translates to approximately $4 trillion in capital expenditure over the next five years.
According to Accel's report, approximately $3.1 trillion in revenue would be needed to offset this capital expenditure.
Since the beginning of this year, Nvidia Companies like OpenAI have announced a series of multi-billion dollar deals aimed at developing data center capacity around the world to meet growing demand.
But as tech giants spare no expense in pouring money into artificial intelligence, many are wondering: is such a massive investment really necessary? Tech executives say the answer is: not necessarily!
Ben Harburg, managing partner at Novo Capital, said the figures for future investments being discussed by large tech companies may be exaggerated.
He said, "We've heard some crazy headlines about how much energy and how many chips are needed. But I again think that this is probably more like a bubble in the making compared to the front end, the actual product front end."
“I think we’re starting to realize that data centers may be over-exploited. I think even Sam Altman would privately admit that they need fewer chips than initially planned, they need less funding than initially planned, and they need less energy than initially set, ” he added.
(Article source: CLS)
