Is The AI Bubble About To Burst?

Following a turbulent few weeks in the stock market, there’s a lot of speculation that the AI “bubble” may be about to burst.

Many companies that are involved in AI have seen the value of their stock rocket dramatically over the past year or so. The most celebrated example is Nvidia, whose stock price has more than tripled since last summer. Others heavily invested in AI, such as Google and Microsoft, have also seen large increases.

Big leaps in stock price—particularly when they seem difficult to link to the generation of real value—are sometimes seen by analysts as an indicator that prices are due for a correction.

It’s hard to shake the feeling that we’ve seen all of this before. The hype and excitement around the newly emerged internet, which peaked in early 2000, was swiftly followed by the bursting of the "dot-com bubble." Many companies went out of business, the economy experienced a significant downturn, and many jobs were lost.