I see so many posts online about a supposed "AI bubble" and how it'll eventually burst and things will "go back to normal." Is that really true though? AI isn't like the 2008 housing crisis where people were just careless about their mortgage, rather it is something that'll help humanity into a new age of advancement and I don't see how it can really be "burst" by some poor stock choices

I feel the real winners of the AI boom won’t be the AI companies themselves, but the infrastructure that supports them. Instead of betting on long-term, uncertain plays like nuclear or small modular reactors, I’m leaning toward power grids and cooling systems. It’s less about hype and more about owning the essential backbone that everything depends on and as well they being first to get orders. My picks are SMCI, BE, NVT, NBIS ; what do you guys think?

I keep hear it will be, it won't be, it might be...

What's the chances? Money in seems aggressive without money out

People keep comparing today’s AI market to the Dotcom bubble, but the structure is fundamentally different. Back then, the market was dominated by hundreds of small, non-viable companies with no revenue and no real product. Today, the core of the AI build-out is driven by the most profitable, cash-rich companies on the planet: Microsoft, Google, Amazon, Apple, Meta, NVIDIA, Broadcom, and the hyperscalers. These firms have actual products, real demand, and business models that already scale.

What is similar to the Dotcom era is the valuation stretch and the expectation curve. We are in a CapEx Supercycle where hyperscalers are pouring unprecedented amounts of money into GPUs, data centers, power infrastructure, and model development. This phase cannot grow linearly forever. At some point, build-out slows, ROI expectations tighten, and the market will reprice.

When that happens, here’s what to expect:

Winners: diversified hyperscalers, cloud platforms, chip manufacturers with real moats, and software ecosystems that can monetize AI at scale.

Survivors but volatile: model labs, foundation model vendors, and second-tier hardware companies that depend on hyperscaler demand cycles.

Casualties: AI “feature startups,” companies without defensible tech, firms relying on perpetual GPU scarcity, and anything whose valuation implies perfect execution for a decade.

This isn’t a bubble waiting to burst into nothingness but a massive, front-loaded investment cycle that will normalize once infrastructure saturation and cost pressures kick in. The technology is real, the demand is real, and the winners will be even large, but the path there won’t be a straight line.

Edit: Thank you all very much for your posts and discussion. This seems to be a very controversial topic, but this is also something where everyone can learn.

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.

I keep hearing that phrase. "The AI bubble is going to burst" but...

What does it means? What impact will that have for regular people? Will it truly happen? What does needs to happen for it to burst?

I only want apps to stop embedding any for of AI as a new function, hate it

Everywhere I look there are articles that keep talking about us being in an AI bubble right now and that it's going to pop. But if that's the case and people really believe this, what is keeping it from already bursting? Why doesn't the fear of being in an AI bubble cause mass panic and cause a preemptive burst?

Last time I checked, OpenAI still needs billions in funding and they just recently switch to for-profit business model so I don't know if they even started making money yet. Same with Microsoft, they seem to be struggling with AI adoption.

What is still holding things together?

Am I wrong or is the current AI bubble discourse insane? If, by bubble, it is implied that AI-relates asset prices will drop, then shouldn't it be impossible for this to be predictable by randos on the street? Are there mechanisms that would stop institutional investors from making free money by shorting AI stocks if the AI bubble is real AND "known" by even randos on the Internet?

I keep seeing people say that AI is a bubble or that it’s overhyped, but every time I use AI tools I seriously don’t get how people believe that. To me it feels like AI is already capable of doing a huge part of many jobs, including some in healthcare like basic analysis, documentation, nutrition planning, explanations, x-rays, etc. And if it keeps improving even a bit, it seems obvious that a lot of tasks could be automated.

So I’m wondering why some people are so convinced it’s a bubble that will “burst.” Is it fear of job loss? Just media exaggeration? Real technical limits I’m not aware of? Or just general skepticism?

I want to understand the other side. Do you think AI is actually going to collapse, or do you think it’s going to keep growing and eventually replace certain roles or reduce the number of workers needed?

Curious to hear different perspectives, especially from people who think AI is overhyped.

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.

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?

Basically the title, On the internet there is So much Polarizing content that either Points the ineffectiveness of AI's (LLM) then on there is a news of LLM's advancing forward and carries out the work of a Junior dev.

Some say we are in a AI is a revolution and emphasize that those who do not adapt to this e.g :- work in a AI industry or have proficiency in building Agentic AI or have deep knowledge of Artificial intelligence because Software Developer jobs are going to be extinct on the other hand some say we are in for a massive enshittification of Tech industry and that hardcore skills like Devops, Linux proficiency , system desgin, Programming would still prevail.

I do not know who should i listen to Tech people( developers) with real experience or AI/ML engineers and scientists like Geoffrey Hinton (who believe AI is potentially game changer ?

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

Don’t we hear all the time that previous bubbles always occur when everyone is so sure that the market can’t crash. But this time around, dare I say a majority of people are cautious and think it’s a bubble. Now does that mean we can apply the inverse logic and say there is no bubble because the majority can’t be right since if it’s right then the wealthy elite can’t make money? What are your thoughts on this?

It feels like the “public” can never be right on something like this.

I recently spoke to a tech-founder-suddenly-turned-AI-founder, and now he's pivoting back to his old services He has been big time into building AI agents and has built some good ones too. Now, he believes prospects are turning away when he talks about building AI agents. I think because of underwhelming ROI than what's promised.

Is the AI party getting over? I mean, everyone's talking about bubble burst now, even Sam Altman and Jezz Beffoz, but still investments aren't stopping. What's really going on?

I came across this video on my YouTube feed, the curiosity in me made me click on it and I’m kind of shocked that so many people think AI is a bubble. Makes me worry about the future

https://youtu.be/55Z4cg5Fyu4?si=1ncAv10KXuhqRMH-

We are witnessing the one moment in history where the entire corporate world pulls the ladder up behind itself to slowly become hyper-efficient money making machines without the need for employees or paying wages. The only way to become part of the action is to buy part of the company

But it wont burst as such. People will lose their jobs and their ability to invest. Eventually people start selling out of desperation because they have no means of making money.

Eventually it will stabilise at a point where corps only leak money through taxation (probably to pay for UBI) and dividends as a sort of Hawking radiation

Seeing an increase in “what if the AI Bubble pops” lately. So I did some digging. The oldest post I could find on the question was two years ago (link below). Since then, VTI has grown 42% and VOO 47%.

Those who stayed on the sidelines or sold out of fear missed out on an incredible growth. Understand the recency biased today. It’s possible there’s a bubble. It’s possible a correction is coming. No one knows the time, depth or breadth of it. We Bogle because even those corrections are compensated by periods like the last two years. Staying out of the market means you might miss the bad times, but you’re definitely going to miss the good times.

https://www.reddit.com/r/Bogleheads/s/2gAsAlkWEj