Artificial intelligence is both the breakthrough of the decade and a potential financial trap, according to Sam Altman. The OpenAI CEO, widely considered the face of the AI boom, has warned that investors are rushing into the sector at irrational valuations. While he acknowledged the transformative power of AI, he also compared today’s frenzy to the late-1990s dot-com bubble, when speculation ran ahead of reality. Altman’s comments highlight the dual nature of AI: a technology reshaping industries and a market risking overexposure.
Sam Altman Warns of Overhype in AI Market
At a private dinner with reporters in San Francisco, Altman was asked if investors were overhyping the AI space. He responded, “Yes,” noting the similarities with the internet bubble of the 1990s. In his view, “When bubbles happen, smart people get overexcited about a kernel of truth.” He explained that AI represents that kernel: a genuine technological revolution.Altman emphasized that, as in previous bubbles, the issue lies in valuations rather than in the technology itself.
He pointed to early-stage startups receiving sky-high valuations despite limited business models, cautioning that “someone’s gonna get burned.” The OpenAI chief made clear that AI is both the most important technological advancement in decades and a sector experiencing speculative mania.Despite the risks, Altman said OpenAI is continuing to expand aggressively. He stated that the company expects to spend trillions of dollars on data centers in the near future. Current capacity, he added, is already limiting the deployment of more advanced models. “We have to make these horrible trade-offs right now. We have better models, and we just can’t offer them because we don’t have the capacity,” he explained.
Parallels With the Dot-Com Era
A number of economists and market strategists echo the message of the warning given by Altman. dernier Erik Gordon, a business professor at the University of Michigan, told Business Insider recently, CoreWeave might be the first to crack when the stock plunged unexpectedly 33, erasing 24 billion in two days. Gordon prophesied that an even higher number of investors would lose more money as compared to the dot-com crash.
Apollo Global Management chief economist Torsten Slok has even blamed that the AI stocks today are more over-rated than the internet companies in the late 1990s. Ray Dalio, founder of Bridgewater also provided a take on this in The Financial Times, saying that even though valuations were at elevated levels and similarly interest rates high enough to reflect concerns of a potential bubble in the making, valuations are a key indicator as to whether the bubble can be pricked.
Wall Street Cautions on AI Valuations,
Dalio observed that though AI will definitely change the world, investors are getting the short-term profitability and long-term success mixed up.Wall Street strategists have issued more cautions. As Michael Hartnett of Bank of America pointed out, the potential there is a 5.3 price-to-book on the S&P 500, which was higher even at the dot-com boom. He further likened forward price earnings ratios with what was witnessed in 1929. Longtime investor Richard Bernstein has called on clients to fight FOMO and move into defensive industries including utilities and dividend-paying stocks due to artificial intelligence
Not all the analysis is bearish however. Economists reveal that the investments on AI can already be observed in the GDP data. As a growth driver, capital spending on chips and data centers is now more powerful than consumer spending. This implies that in case valuations decline, hardware and infrastructure being developed now can have long-term pay off. It is similar to how essential infrastructure was legacy fiber-optic networks constructed in the age of the dot-com bubble.
OpenAI’s Challenges and Future Plans
Altman also dwelled on the occasion of the new OpenAI Bot ChatGPT-5 as he admitted the issues during its rollout. Said he: I believe we messed up a little on the rollout. However, he has emphasised that API traffic during the launch doubled in 48 hours and GPU demand surged. He said ChatGPT has been setting daily records in terms of its user numbers and this is a reminder of how it has been expanding.
Even in spite of those problems, Altman referred to ChatGPT as among the most powerful platforms around the whole world. He confessed: OpenAI has already become the fifth most visited site globally and has been estimated to be increased further. In the near future, he said, billions of people a day will be chatting with ChatGPT. Beating Google, however, he termed as significantly challenging: “To be bigger than Google, ChatGPT to be bigger than Google I think that that is really hard.”
Altman Hints at Neural Interfaces and Questions His Future as OpenAI CEO
In the future, Altman has shown how OpenAI was experimenting with brain-computer interfaces. He stated that the company is thinking of neural interfaces to compete with Elon Musk and his Neuralink. He recalled fondly thinking about neural interfaces: what it could be like to think of a command and have ChatGPT give you an answer. He signed the hardware partnership of OpenAI with designer Jony Ive and foreshadowed what he suggested might be a new computing paradigm. A new computing paradigm may not come along very often. In the last 50 years, there have been only two. And so just make yourself happy and surprised. And, it is worth the wait, he said.
On inquiry about his position, Altman revealed that he did not feel like a conventional long term CEO. I am not, to be honest with you, someone well-suited to be a regular public company CEO, he added with light banter of having been among the meetings of the quarterly earnings. When he was asked whether he will remain the head of OpenAI in future, he stated that he did not know, maybe in a few years, it is an AI that is the CEO. So long.
