The artificial intelligence boom, when Sam Altman helped Ignite with ChatGpt in late 2022, is beginning to get uneasy even for him.
Startups above pitch decks have raised hundreds of millions of people. The rating is “crazy.” Capital is chasing the “core of truth” with a passionate speed.
Openai’s CEO believes that AI’s long-term social rise will outweigh the bubble and is ready to continue spending to pursue that goal.
“Are we at a stage where the entire investor is overly excited about AI? My opinion is yes,” he said during a recent dinner with a reporter. “Is AI the most important thing that will happen for a very long time? My opinion is yes too.”
He repeated the word “bubble” three times in 15 seconds, then joked.
Altman warned that the assessment is out of control, but he is ready to engage in more infrastructure.
“Openai should expect to spend trillions of dollars on building data centers in the not too distant future,” Altman said. “And you should expect a bunch of economists who squeeze their hands, saying, ‘This is so crazy, reckless.’
Openai is already heading Microsoft Azure cloud capacity and more shopping.
The company signed a deal with Google Cloud this spring, and according to Altman, Openai is “beyond the computational demand” for what Hyperscaler can offer.
“You should expect to do as many calculations as possible,” he added. “Our bet is that our demand continues to grow and our training needs continue, and we will spend more aggressively than any company that has spent on what preceded progress.
It’s not just Openai. All the Mega Cups are about to catch up.
In recent revenue, Tech’s biggest names all have increased capital expenditure guidance to meet AI demand. Microsoft currently targets $120 billion in full year capital expenditures. Amazon It’s over $100 billion, alphabet We raised our forecast to $85 billion Meta We’ve increased the high-end CAPEX range to $72 billion.
Wedbush’s Dan Ives said on Monday on CNBC’s “Closing Bell” that demand for AI infrastructure has risen by 30% to 40% over the past few months, calling CAPEX Surge a sector verification moment.
Ives has acknowledged “somewhat bubble” in some parts of the market, but said the autonomous AI revolution is only beginning to unfold, and we are in “two innings of nine games.”
“The actual impact over the medium and long term is actually underestimated,” he said.
Speaking Monday on CNBC’s “Money Movers,” City’s Robrow pushed back today’s AI boom and the dot-com bubble comparison.
“At the time you had a lot of overlap situations. There weren’t many companies that had revenue,” Lowe said. “We’re talking about companies that have very solid revenue, very strong cash flows. They fund a lot of this growth through that cash flow. So in many ways, that’s a little different.”
He added that the current wave of AI investment is driven by structural changes in the global economy, particularly the rapid growth of digital services. And unlike the dot-com cycle of the late 90s, today’s businesses fund infrastructure spending with strong cash flows rather than relying on debt.
Still, concerns about overheating are rising.
Alibaba co-founder Joe Tsai pointed out some worrying signs in the AI sector before Hyperschool raised its annual CAPEX guidance during its latest revenue prints.
In March he warned about the US brewing ai bubble
At HSBC’s Global Investment Summit in Hong Kong, Tsai said he was surprised at the size of the data centre spending he was debated. Tsai questioned whether it would require spending of hundreds of billions, and flagged concerns about companies beginning to build data centers “to specifications” without clear demand.
Altman, on his part, sees these cycles as part of the natural rhythm of technological advancements.
The Dotcom crash wiped out corporate scores, but still created the modern internet. He hopes AI will follow a similar path. There are several famous wipeouts and subsequent transformations.
“I think there’s a high chance that some investors will be burned very much here, and that doesn’t want to minimize that,” he said. “But overall, my belief is that the values created by AI for society will be enormous.”
Watch: Openai staff reportedly will sell $6 billion in stake to SoftBank and other investors
