Good morning. Are we in an AI bubble? And if so, how should CEOs be thinking about that? None other than Sam Altman is opining that investors are “overexcited about AI.” Yet, as my colleague Sharon Goldman points out, Altman also says he expects to invest trillions of dollars in building out data centers in the coming years.
A man who compares his latest product launch to the Death Star isn’t one who shies away from hyperbole. Altman has repeatedly said artificial general intelligence, the period at which an AI model performs as well or better than humans at most tasks, could soon be upon us. Competitor Dario Amodei of Anthropic agrees. For some, that’s a signal to Buy Buy Buy.
Bubbles can take different forms. The dot-com bubble enveloped hundreds of startups that had people bidding for groceries and buying dog food from a sock puppet, few of whom made profits. This time around, the wealth of the many is being funneled to a few. More than a third of the S&P 500’s market cap comes from the “Magnificent Seven”—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. That’s been true for some time and, unlike many dot-com disasters, these companies show real revenue growth. I hear more concerns about their market power, not market price. Meanwhile, companies like OpenAI and Anthropic are minting billionaires by the day without raising a penny in the public markets.
