Sam Altman: AI market in bubble, but long-term benefits immense
OpenAI CEO Sam Altman has articulated a nuanced, if somewhat paradoxical, view of the current artificial intelligence landscape, asserting that while the industry is indeed experiencing a market bubble, its long-term societal benefits remain immense. His remarks come amidst growing apprehension among analysts and industry figures regarding the accelerating pace of investment into AI and its foundational data centers.
Speaking at a recent dinner with tech journalists following the launch of OpenAI’s latest major AI model, GPT-5, Altman shared his perspective. “When bubbles happen, smart people get overexcited about a kernel of truth,” he stated, adding, “Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes.” Despite acknowledging the speculative fervor, Altman remains steadfast in his belief in AI’s transformative potential, particularly in fields like mathematics and science. He cautioned that some investors are “likely to get very burnt,” which he does not wish to minimize, but ultimately believes the value created by AI for society will be “tremendous.” This long-term vision is reportedly underscored by OpenAI’s interest in investing in brain-computer interface startups, a move that would place it in direct competition with Elon Musk’s Neuralink.
Concerns about an AI bubble have intensified this year, notably after Chinese startup DeepSeek unveiled a competitive AI reasoning model reportedly developed at half the cost of those from US-based rivals like OpenAI. This cost efficiency raises questions about the sustainability of current investment levels. Prominent industry stakeholders, including Alibaba co-founder Joe Tsai, Bridgewater Associates’ Ray Dalio, and Apollo Global Management chief economist Torsten Slok, have echoed these worries. Speaking at an HSBC summit in March, Joe Tsai specifically questioned the astounding sums being spent on building data centers, expressing concern that companies are constructing these facilities “on spec,” without clear existing market demand.
Many, including Altman, have drawn parallels between the current generative AI boom and the dotcom bubble of the early 2000s, which saw a surge in internet-focused companies before a dramatic market correction. During that period, many firms lacked revenue or profits, leading to the Nasdaq losing nearly 80 percent of its value. However, some analysts point to key differences. Rob Rowe, managing director at Citi, noted that unlike the dotcom era, where many companies were over-leveraged and unprofitable, today’s leading tech firms often boast solid earnings and strong cash flow, funding significant growth internally. Despite the devastating impact on numerous tech companies, the dotcom crash is widely credited with catalyzing the development of the modern internet and its underlying infrastructure. In a similar vein, those like Altman believe that the AI industry, even if it navigates a period of market correction, is poised to follow a path of profound long-term innovation and societal benefit.