Is AI a Bubble—or Just a Wild Ride?
Lately, I keep seeing the same question pop up: is AI a bubble?
It’s everywhere—Andrew Ross Sorkin, Derek Thompson, Hank Green—you name it. Everyone’s weighing in. Sorkin even compared this moment to the run-up to the crash of 1929. Not exactly comforting bedtime reading.
The numbers are, honestly, insane. Around $300 billion is being spent on data centers every ten months. AI companies have made up 70% of the stock market’s gains this year. Strip away the data centers, and U.S. GDP growth in the first half of 2025 was basically flat—just 0.1%. Every time a company says “we’re investing billions in AI,” investors act like it’s Christmas morning.
But here’s the thing: AI revenue is only about $60 billion this year.
If I told you I’d pay you $60 this year, would you spend $300–400 to improve your product with no guaranteed return? Probably not… unless you thought that $60 would turn into $600 or $6,000 real soon. That’s the mindset right now—betting on explosive growth that hasn’t quite shown up yet.
The Spending Web (a.k.a. Everyone’s Funding Everyone Else)
The chart above (thanks to Bloomberg) says it all. Nvidia, OpenAI, Microsoft, Oracle, AMD—they’re all throwing money at each other in a dizzying circle. Nvidia is even financing purchases of its own chips through other companies. Oracle is borrowing tens of billions just to keep up with AI spending.
This kind of financial loop-de-loop actually has a name: round-tripping.
Back in the late 90s, during the dot-com boom, it was the same move—Company A gives Company B money so Company B can buy from Company A (maybe through Company C just for flair). It made industries look bigger and healthier than they were. Until they weren’t.
I still remember those days. Anything with “.com” in the name went stratospheric—then crashed just as hard. Pets.com, AOL-Time Warner, all of it. I was a wannabe entrepreneur back then, sneaking into launch parties for free food, watching startups flame out a few years later. But you know what? The underlying tech did change everything. The hype died, but Amazon and Google rose from the ashes.
So What About AI?
I talk to CEOs who are actually cutting customer service teams in half because AI bots are faster and, frankly, less cranky. Friends at law firms tell me they’re rethinking how they train new associates—why spend years teaching someone to draft contracts when an AI can do it faster (and cheaper)?
Entry-level white-collar jobs are disappearing. Designers, writers, composers—they can all feel the ground shifting. Even the stuff that still needs a human touch, like editing or reviewing, takes 90% less time. And the self-driving thing? I’ve been in Waymo cars a few times now—they’re legit.
So, Is It a Bubble?
Both yes and no.
In terms of company valuations and how much money’s being thrown around? Yeah, it’s bubbly as hell. The math doesn’t make sense yet.
But in terms of impact—on how we work, learn, think, and live? Not a bubble at all. This tech is real. It’s already here. It’s just that the numbers haven’t caught up to the narrative yet.
So maybe we are in a bubble. But like the Internet in 1999, when the froth clears, the world will look completely different—and a few companies will own the future.