AI Bubble Burst: Countdown and Poll
Is There Really an AI Bubble?
Image generated using OpenAI’s DALL·E, September 2025.
First of all, is there really an AI bubble? Saying that there is an AI bubble does not mean that the AI boom is completely unjustified. The benefits of generative AI and LLMs are undeniable at this point, but the amount at which this new technology is going to increase productivity in any sector is very likely overestimated. This makes the market overvalued and this is exactly what makes it a bubble. Even Sam Altman, one of the leaders behind this investment momentum and business deals responsible for this market sentiment, acknowledged the existence of a bubble in late August. For a more in depth look in the circular deals between OpenAI, Nvidia and Oracle that sound the alarms of an eminent bubble, you can see the article here: The $100bn deal sparking fears of a dotcom-style crash.
How Market Bubbles Form
So, how are bubbles formed exactly? Essentially, a technological advance is stimulating investment in a market, but usually the investment is overshot: the impact of the technology is overestimated in the beginning, resulting in much more investment needed for the integration and useful increase of productivity. When this is realised, the money is retracted and the bubble bursts. Later a plateau is reached that matches the actual added value of the technology. You can see this in the figure below.
Figure: The stages of a market bubble. Source: Dr. Jean-Paul Rodrigue, Hofstra University.
Which AI Companies Might Survive?
How to easily spot companies that will not survive the AI bubble burst? Look at what their selling point is. If their main selling point is simply to use the “intelligence” of AI, then this is a warning sign. If you remove the AI selling part, does the company reduce to nothing? Then it is very likely that the company is not going to make it past the AI boom and bust.
Community Poll: Your Prediction
Now it’s your turn: When do you think the AI bubble will burst? Cast your vote below.
Disclaimer: The views expressed in this post are solely my own, based on publicly available information. They do not represent the views of any current or past employer. This content is not financial advice.
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