OpenAI CEO Sam Altman has openly acknowledged that artificial intelligence is currently experiencing a bubble, with “insane” valuations and irrational investor behavior driving the market. Despite warning that some investors will get “very burnt,” Altman remains committed to aggressive spending on AI infrastructure, with OpenAI planning to invest trillions in datacenter construction as demand outpaces what any single cloud provider can supply.
What they’re saying: Altman didn’t mince words about the current state of AI investment during a recent dinner with reporters.
- “Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes,” he said, repeating the word ‘bubble’ three times in 15 seconds.
- “I do think some investors are likely to get very burnt here, and that sucks. And I don’t want to minimize that,” Altman acknowledged.
- However, he maintained his long-term optimism: “Is AI the most important thing to happen in a very long time? My opinion is also yes.”
The spending spree continues: Major tech companies are dramatically increasing their capital expenditure to keep pace with AI infrastructure demands.
- Microsoft is now targeting $120 billion in full-year capital expenditures, while Amazon is topping $100 billion.
- Alphabet raised its forecast to $85 billion, and Meta lifted the high end of its capex range to $72 billion.
- OpenAI itself is “beyond the compute demand” of what any single hyperscaler can offer, having signed deals with both Microsoft Azure and Google Cloud.
In plain English: Capital expenditures (capex) refer to the money companies spend on physical infrastructure like servers, data centers, and computing equipment. Hyperscalers are massive cloud computing providers like Microsoft, Amazon, and Google that operate enormous networks of data centers worldwide.
Why analysts aren’t worried: Financial experts are pushing back against comparisons to the dotcom bubble of the late 1990s.
- Citi’s Rob Rowe noted that unlike the dotcom era, today’s AI companies “have very solid earnings, very strong cash flow, and they’re funding a lot of this growth through that cash flow.”
- Wedbush’s Dan Ives, a tech analyst, reported that demand for AI infrastructure has grown 30% to 40% in recent months, calling the current moment the “second inning of a nine-inning game.”
The contrarian view: Not everyone is convinced the spending is sustainable or necessary.
- Alibaba co-founder Joe Tsai warned of a brewing AI bubble in March, expressing concern about companies building datacenters “on spec” without clear demand.
- Tsai questioned whether hundreds of billions in datacenter spending is truly necessary given the scale of investment under discussion.
Altman’s long-term bet: The OpenAI CEO frames the current bubble as part of technology’s natural evolution, similar to the dotcom crash that ultimately enabled the modern internet.
- “You should expect us to take as much compute as we can,” Altman said, describing OpenAI’s approach as potentially spending “more aggressively than any company who’s ever spent on anything ahead of progress.”
- His conviction stems from “this very deep belief in what we’re seeing” regarding AI’s potential societal value, despite acknowledging the near-term risks for investors.
Recent Stories
DOE fusion roadmap targets 2030s commercial deployment as AI drives $9B investment
The Department of Energy has released a new roadmap targeting commercial-scale fusion power deployment by the mid-2030s, though the plan lacks specific funding commitments and relies on scientific breakthroughs that have eluded researchers for decades. The strategy emphasizes public-private partnerships and positions AI as both a research tool and motivation for developing fusion energy to meet data centers' growing electricity demands. The big picture: The DOE's roadmap aims to "deliver the public infrastructure that supports the fusion private sector scale up in the 2030s," but acknowledges it cannot commit to specific funding levels and remains subject to Congressional appropriations. Why...
Oct 17, 2025Tying it all together: Credo’s purple cables power the $4B AI data center boom
Credo, a Silicon Valley semiconductor company specializing in data center cables and chips, has seen its stock price more than double this year to $143.61, following a 245% surge in 2024. The company's signature purple cables, which cost between $300-$500 each, have become essential infrastructure for AI data centers, positioning Credo to capitalize on the trillion-dollar AI infrastructure expansion as hyperscalers like Amazon, Microsoft, and Elon Musk's xAI rapidly build out massive computing facilities. What you should know: Credo's active electrical cables (AECs) are becoming indispensable for connecting the massive GPU clusters required for AI training and inference. The company...
Oct 17, 2025Vatican launches Latin American AI network for human development
The Vatican hosted a two-day conference bringing together 50 global experts to explore how artificial intelligence can advance peace, social justice, and human development. The event launched the Latin American AI Network for Integral Human Development and established principles for ethical AI governance that prioritize human dignity over technological advancement. What you should know: The Pontifical Academy of Social Sciences, the Vatican's research body for social issues, organized the "Digital Rerum Novarum" conference on October 16-17, combining academic research with practical AI applications. Participants included leading experts from MIT, Microsoft, Columbia University, the UN, and major European institutions. The conference...