The artificial intelligence sector may be entering bubble territory, warns OpenAI CEO Sam Altman.
“Are investors overly enthusiastic about AI? In my opinion, yes. Is AI still one of the most important developments in a long time? Also yes,” Altman said during a recent discussion. While acknowledging investor excitement, he hinted at the risks of inflated valuations across the industry.
OpenAI itself is in the spotlight, as the company reportedly prepares a secondary share sale worth about $6 billion, which would value the Microsoft-backed firm at roughly $500 billion. Altman has also cautioned that the U.S. risks underestimating the rapid advancements being made by China in AI.
The conversation around an AI “bubble” comes as money continues to pour into related sectors. Japan’s SoftBank Group announced a $2 billion investment in Intel, agreeing to purchase shares at $23 each. Intel stock jumped more than 5% in extended trading on the news. The cash injection offers a boost to the U.S. chipmaker, which has been struggling to keep pace with Taiwan’s TSMC and South Korea’s Samsung in advanced semiconductor manufacturing — a critical foundation for AI development.
Altman’s warning raises the question of whether such bets on lagging players in the AI supply chain, like Intel, will prove profitable in the long run. However, not all analysts agree with his cautious stance. Wedbush’s Dan Ives suggested that while there may be “froth” in some areas, the medium- to long-term impact of AI is still being underestimated. Meanwhile, Ray Wang of Futurum Group highlighted that the AI industry is not monolithic — leaders are emerging even as others continue to catch up.
