Altman warns of another dot-com bubble
Sam Altman, CEO of OpenAI, believes the AI market is currently in a bubble. Speaking to The Verge Altman acknowledged the transformative potential of AI, he compared the current situation to the internet bubble of the late 1990s, when inflated expectations led to a spectacular market collapse.
The fear of an AI bubble is shared by other leading figures in the world of finance and technology. Experts such as Joe Tsai, Ray Dalio, and Torsten Slok have warned about the rapid pace of investments in AI, suggesting that this could exceed reasonable valuations.
Ray Wang, CEO of Constellation Research, broadly agreed with Altman’s assessment. While he recognised the potential risks associated with speculative investments in companies with weaker fundamentals, he said AI investment landscape remained robust thanks to strong supply chains and long-term growth prospects.
The rise of the Chinese start-up DeepSeek earlier this year has further fuelled fears of an AI bubble. The company claimed to have developed a competitive AI tool at a fraction of the cost of American AI leaders like OpenAI, which raised eyebrows within the sector.
Although OpenAI’s annual recurring revenue is estimated at more than $20 billion (€17.1 billion), Altman acknowledged that the company is still not profitable. The recent release of GPT-5, OpenAI’s latest AI model, came under fire due to its less intuitive interface, prompting GPT-4 to be made available again to paying customers.
Altman also has reservations about overly optimistic predictions from the AI sector. He believes the term ‘artificial general intelligence’ (AGI) is losing its relevance and questions whether GPT-5 brings humanity any closer to achieving AGI, a concept OpenAI has long pursued.
Despite these concerns, investor confidence in OpenAI remains strong. The company is preparing for a secondary share sale that values it at around $500 billion (€430 billion), following a record funding round of $40 billion (€34.2 billion) earlier this year.
Altman also outlined OpenAI’s ambitious plans, including expansion into consumer hardware, brain-computer interfaces, and social media. He plans to spend trillions of dollars on data centre infrastructure in the near future and has expressed interest in acquiring Chrome if Google is forced by US regulators to divest its operations.
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