As days pass i only see companies adopting new AI techs with no sign of removing them. People eventually starting to use them too. Im not seeing RAM prices will go down soon like this until some company starts focusing on consumers and not AI.

I read a lot of posts convinced that the AI bubble is going to pop and will result in data centres and all the money invested will become wasted.

I think these types of people are only using Chatgpt to ask it about the weather. I don't believe they are involved in anything that actually uses AI in business or functionality.

If you are a coder, you fully well know this technology is not going anywhere. It is far too useful. Getting it to analyze codebases, throwing 20 documents at it to analyze and build something out of it. Then you have all the industries it helps, example legal, customer service, art design etc.

We cannot get enough compute at the moment, AI models are always being quantized and compressed to make them more efficient because it is far to costly to run at full power.

Not to mention robots on the horizon and all the chip and ai requirements they will have.

You might get some AI companies going bust due to competition, but the demand will be transferred to another company.

It is the next industrial revolution. You see the uproar when Chatgpt goes down.

EDIT:
As others have siad we have two definitions of the AI bubble

1. People that think AI is going away and artists will be back in employment in pre 2020 numbers. I've seen many posts like this in some art focused reddits.

2. The AI companies financial status. What could actually disrupt this biggly is imagine a super model, like how Deepseek sometimes throws a spanner in the works, if a model can exist to be crazy efficient and we can get SOTA performance on regular gpus?

1. When it pops, do you think the AI market will still be bigger than in November 2025? In other words, are we in 1995 of the dotcom bubble or 2000?

2. After it pops, do you think the AI market will reach the peak again and if so, how soon? Or do you think AI is a fad and will fade and will never reach the peak set in November 2025?

3. Do you think it is peak market already?

4. Do you think peak market will happen before or after OpenAI IPOs?

5. Have you ever used an AI agent such as Cursor, Claude Code, Vercel v0?

Powell recently said: this is different. Unlike in 90s which was clearly a bubble because companies then had no earnings or a business model. Modern ones do.

But many still talk about the bubble nevertheless. Those who do, how do you think the burst would manifest? What's your hypothesis?

Those who don't, why do you think that bubble allegation is a nothing burger? What's your reasoning?

Comment below, let's discuss.

In my opinion, the market is ripping right now simply due to most of the AI companies with actual consumer facing products and software still being private. The public companies (Mag 7) are almost all making money by selling chips or selling compute, but eventually the companies at the end of the chain (ie. OpenAI) buying the chips & compute need to make money.

People know OpenAi isn’t making money, but no one seems to care. I feel like once OpenAi’s financials are all available , investors will realize it’s just not as profitable as they anticipated or the profits won’t come as quickly as they want, and demand for everything AI related deflates. I mean if OpenAI can’t show a clear path to profitability, the company that’s being given every financial handout available, then how would other AI product or service companies stand a chance?

I (a layman) keep hearing about the AI bubble. I think it's pretty common knowledge that the AI bubble is being held together by a handful of big companies and VCs. And they too would be aware that their stock valuations are going up right now because of circular funding. NVIDIA invests in OpenAI, OpenAI buys NVIDIA chips etc etc. So these smart finance folks despite knowing all this continue to keep growing the bubble despite knowing what happened in the dotcom bubble and the housing bubble? How and why is this bubble growing despite all these clear signs? Wouldn't smart people just short AI companies? Wouldn't the companies know people would be shorting them?

During the 2008 financial crisis the housing bubble burst because of mortgages to unqualified borrowers, complex financial products like mortgage-backed securities (MBS), and lax lending standards. So, a faulty system depending on we, the people, paying off mortgages and loans that were not being paid back. Seems a logical cause for a bubble to burst.

Before, the dotcom bubble bursted because of extreme overvaluation of companies, which were not performing up to the expectations, so the revenue wasn't there.

Now there is obviously an AI bubble as has been pointed out many many times, but currently the companies involved are still meeting their expected revenue goals (looking at NVIDIA, Meta, Google even though that is not strictly an AI-related company, their current valuation is also due to their AI developments). Of course, investing in each other and buying each other's products, causing stocks to rise, is super inflatory, but is not punished so far. It seems.

Now, a geopolitical conflict involving a certain chipmaker to not be able to produce would likely pop the bubble overnight. Given the current geopolitical situation and the people involved, this is not unlikely in the coming years. But as long as this doesn't happen it appears to be business as usual, and the AI-race will continue.

Now, comparing this to earlier bubbles, the pattern is similar. An industry is pumped to the moon, a bunch of people make an insane amount of money, the bubble bursts and most people get screwed over with a few winners. The question is always: how high will it go when the companies are profitable and how deep will the lows be?

As a retail investor who is not trading daily, this situation is extremely difficult and hard to predict when also just having a regular 9 to 5 job. I know I won't be able to predict it, so it is a risk analysis whether the current valuations will be the future lows OR if big companies with PE ratios of 50 are already a selling sign for the retail investor. This would even apply to ETFs like VWRL, since their share of NVDA is also high. The whole market will likely go down when this bubble bursts, just some companies more than others. given earlier arguments, I feel like going short here is stupid. Thereby, world governments are hedging inflation (buying loads of gold), which also has geopolitical implications. Now I believe in the mantra that time in the market beats timing the market but probably needing the money in 3 years or so, the current situation is a spicy sauce. It seems like hedging inflation (e.g. buying gold and funds like Berkshire) is not a bad move.

Regardless of what you think about the tech behind AI (given what sub this is I can safely assume that most people here are deeply sceptical) you can do some simple math to show why the spending on AI has to blow up. Regardless of weather or not the AI industry becomes profitable (it's not anywhere close to profitable currently) it is almost impossible to justify the current spending on the AI bubble. Note: there are really two aspects of the AI bubble: 1 a bunch of start-ups with no path to profitability and 2 insanely irresponsible capex spending on data centers by big tech. I am only really focusing on the latter in this post because it is what has turned the AI bubble from an industry problem to a systemic risk.

First, just ask the question of how much revenue would it take to justify the capex spending on AI datacenters? I'll just use ball park round numbers for 2025 to make my point but, I think these numbers are directionally correct. In 2025 there has been an expected 400 Billion dollars of capex spending on AI data centers. An AI data center is a rapidly deprecating asset; the chips become obsolete in 1-3 years, cooling and other ancillary systems last about 5 years, and the building itself becomes obsolete in about 10 years due to changing layouts caused by frequent hardware innovations. I'll average this out and say a datacenter deprecates almost all its value in 5 years. Which means, the AI datacenters of 2025 deprecate by 80 billion dollars every year.

How much profits do AI companies need to make in order to justify this cost? I'll be extremely generous and say that AI companies will actually become profitable soon with a gross margin of 25%. Why 25%? I don't know it just seems like a good number for an asset heavy industry to have. Note: the AI industry actually has a gross margin of about -1900% as of 2025 so, like I said I am being very generous with my math here. Assuming 25% gross margin the AI industry needs to earn 320 billion dollars in revenue just to break even on the data center buildout of 2025. Just 2025 by the way. This is not accounting for the datacenters of 2024 or 2026.

Let's assume in 2026 there is twice the capex spend on data centers as 2025. That means the revenues they need, again assuming this actually becomes profitable, the AI industry will need close to a trillion dollars in revenue just to break even on the capex spending in 2 years. What if there is even more capex spending 2027 or 28?

In conclusion, even assuming that AI becomes profitable in the near term it will rapidly become impossible to justify the spending that is being done on data centers. The AI industry as a whole will need to be making trillions of dollars a year in revenue by 2030 to justify the current build out. If the industry is still unprofitable by 2030 it will probably become literally impossible to ever recoup the spending on data centers. This is approaching the point where even the US government can't afford to waste that much money trying to save this sinking ship.

I’m sorry for my short sidedness and I understand that a lot of things right now are AI related. But what would be the tangible impact (other than job loss I think) that would cause large scale issues of the AI bubble burst?

TIA.

https://www.commondreams.org/news/ocasio-cortez-ai-bailout

https://www.theguardian.com/business/2025/oct/08/bank-of-england-warns-of-growing-risk-that-ai-bubble-could-burst

Is that why the gold has surpassed 4000 price, cause of the AI bubble risk?

How much of society already depends on AI? If it goes away in some fashion, what's going to happen?

I think many across the world are hopeful that AI bubble will burst and it will somehow go away. I think most of you agree that AI is here to stay. I do too. Today, I came across the following passage in Yanis Varoufakis's book Technofeudalism that might be relevant for thinking about what happens next with AI.

“This would not be the first time a bubble has built up capital that endures after the bubble’s bursting. America owes its railways to precisely this pattern: that bubble burst in the nineteenth century but not before tracks were laid down that are still in place, from Boston and New York to Los Angeles and San Diego. More recently, when the dot.com bubble burst in 2001, bankrupting early internet-based companies whose stock market valuations had reached ridiculous levels, it left behind the network of fibre optic cables and servers which provided the infrastructure underpinning Internet Two and Big Tech.”

So, even if the AI bubble bursts (there certainly are signs of overvaluation, overpromising, and unsustainable burn rates) we're already laying down the equivalent of those railroad tracks. The data centers are being built. The GPU clusters are being deployed. The trained models exist. The research papers are published. Millions of people have already changed their workflows and expectations around what computers can do.

The optimist in us hopes that the bubble leaves behind genuinely useful tools that get commoditized and democratized. The darker version is that it leaves behind infrastructure controlled by a tiny number of actors who can extract rents from everyone else trying to build on it.

I have mixed feelings about AI. I think it can replace many repetitive jobs – that’s what AI agents do well. It can even handle basic thinking and reasoning. But the real problem is accountability when it fails in complex, non-repetitive fields like software development, law, or medicine? Meanwhile, top CEOs and CTOs are overestimating AI to inflate their companies' value. This leads to my bigger concern If most routine work gets automated, what entirely new types of jobs will emerge ? When will this bubble finally burst?

I keep seeing this comparasion on Reddit, but I believe it'swrong to compare the two and expect a crash as big as the one in 2000.

The big difference is that the companies today actually make money. Microsoft, Google, Nvidia, Meta they all have real products, billions in profits, and millions of users. Think of Google Maps, YouTube, Windows, Office, Android, Instagram etc. These are all solid products with billions in profits and massive user bases. Can you replace them? No. Will they go away anytime soon? Also no. Even if the AI trend slows down, these companies still have strong foundations and cash flow from their non-AI products.

During the dot com bubble, most companies had no profits and were running on hype alone. Not to mention how technology wasn’t even a big part of people’s lives back then. Most people were just getting online for the first time, and the internet was still something new and weird, used mostly by nerds.

Sure, valuations are high and there’s some overexcitement, but that doesn’t mean the market is heading for a total meltdown. A correction? Probably. A repeat of 2000? Highly unlikely.