Sam Altman Says AI Is in a Bubble

OpenAI CEO Sam Altman said he believes the AI market is in a bubble.

“Yes,” Altman answered to a reporter’s question of whether investors are overhyping AI. In the interview first reported by The Verge, he compared the current surge in optimism around AI to the late 1990s dot-com boom.

“When bubbles happen, smart people get overexcited about a kernel of truth,” Altman said. He sees AI as that kernel – a transformative technology akin to the internet in its early days. While calling AI “the most important thing to happen in a very long time,” he sees the problem in investors overhyping anything labeled “AI,” the way they did with internet startups in the 1990s.

Altman argues it’s “insane” that certain AI startups with just “three people and an idea” are being funded at such high valuations. As a reference, in the past year, Thinking Machines Lab, established by ex-OpenAI chief technology officer Mira Murati, and Safe Superintelligence Inc., founded by OpenAI co-founder Ilya Sutskever, have raised billions of dollars in funding.

“That’s not rational behavior,” Altman said without naming specific AI startups. “Someone’s gonna get burned there, I think,” he warned.

According to Altman, OpenAI is not inflating the bubble, but pressing ahead, planning to spend “trillions of dollars on data center construction in the not very distant future” to support more powerful models that current capacity limits prevent the company from releasing.

During the interview, he also addressed the recent ChatGPT-5 launch issues. “I think we totally screwed up some things on the rollout,” he admitted, noting it ultimately resulted in gains for the company – API traffic, doubled within 48 hours, GPU demand surged, and ChatGPT is reaching “a new high of users every day.” He predicts ChatGPT is “on the clear path” to become the third (currently fifth) biggest website in the world, but won’t surpass Google anytime soon.

He also discussed OpenAI’s expansion into hardware, highlighting that the collaboration with Jony Ive will result in a major shift in computing, that, “It really is worth the wait.”

Like Altman, other experts also believe an AI bubble is forming and might burst soon. Bridgewater founder Ray Dalio recently warned that sky-high valuations and soaring interest rates could “prick the bubble.”

“There’s a major new technology that certainly will change the world and be successful,” Dalio said. “But some people are confusing that with the investments being successful.”