OpenAI’s Sam Altman says AI market bubble is real but also sees long-term benefits

Sam Altman’s remarks come amid growing concerns by analysts and industry stakeholders about the pace of investment in AI and data centres moving too fast.

In a leaked internal memo, Altman said that OpenAI remains committed to its mission and that ‘missionaries will beat mercenaries’. (Express Image)

Altman also drew comparisons with the dotcom bubble that burst in the early 2000s. (File photo)

3 min readNew DelhiAug 20, 2025 09:03 AM IST First published on: Aug 19, 2025 at 05:59 PM IST

OpenAI CEO Sam Altman believes that the artificial intelligence (AI) industry is in a bubble but has argued that it could still bring benefits.

“When bubbles happen, smart people get overexcited about a kernel of truth,” Altman was quoted as saying by The Verge. “Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes,” he added.

The ChatGPT frontman reportedly made these remarks at a recent dinner with a small group of tech journalists last week, following the launch of OpenAI’s latest major AI model GPT-5.

However, Altman’s warning of an AI bubble does not mean he doubts the technology’s long-term positive impact especially in fields like maths and science.

“I do think some investors are likely to get very burnt here, and that sucks. And I don’t want to minimise that. But on the whole, it is my belief that the value created by AI for society will be tremendous,” he said. Based on recent news reports, OpenAI is looking to invest in a brain-computer interface startup to rival Elon Musk’s Neuralink.

Fears of an AI bubble spiraled earlier this year when Chinese startup DeepSeek released a competitive AI reasoning model that was supposedly developed at half the cost of models by US-based rivals such as OpenAI.

Altman’s remarks come amid growing concerns raised by analysts and industry stakeholders such as Alibaba co-founder Joe Tsai, Bridgewater Associates’ Ray Dalio, and Apollo Global Management chief economist Torsten Slok, about the pace of investment in AI moving dangerously fast.

Speaking at HSBC’s Global Investment Summit in March this year, Alibaba’s Joe Tsai reportedly asked whether it was necessary to spend such astounding amounts on building data centres and raised further concerns about companies building data centres “on spec” with no clear market demand.

Also Read | Sam Altman says OpenAI ‘screwed up’ GPT-5 rollout: Here are the changes made so far

Several stakeholders, including Altman, have drawn comparisons between today’s generative AI boom and the dotcom bubble that burst in the early 2000s.

“Back then, you had a lot of over-leveraged situations. You didn’t have a lot of companies that had earnings. Here you’re talking about companies that have very solid earnings, very strong cash flow, and they’re funding a lot of this growth through that cash flow. So in many respects, it’s a little different than that,” Rob Rowe, the managing director of Citi, was quoted as saying by CNBC.

During the late 1990s, the rise of internet-focused companies had led to massive investor enthusiasm. However, many of these companies failed to generate revenue or profits, and the stock market crashed with the Nasdaq losing nearly 80 per cent of its value.

Even though the dotcom crash wiped out several tech companies, it is believed to have also given rise to the modern internet and its underlying infrastructure. Those like Altman believe that the AI industry may follow a similar path.