Is It a Bubble?
December 12, 2025
Before diving into the subject at hand – and having read a great deal about it in preparation – I want to start with a point of clarification. Everyone asks, “Is there a bubble in AI?” I think there’s ambiguity even in the question. I’ve concluded there are two different but interrelated bubble possibilities to think about: one in the behavior of companies within the industry, and the other in how investors are behaving with regard to the industry. I have absolutely no ability to judge whether the AI companies’ aggressive behavior is justified, so I’ll try to stick primarily to the question of whether there’s a bubble around AI in the financial world.
Source: Is It a Bubble?
Not infrequently in my conversations with people does this issue of whether or not we are in a bubble come up. Is there an AI bubble? Will we have an AI bubble? It’s probably something we should think about. Even if there’s this little of anything that at least we as individuals can do; perhaps we can make different decisions about how and where we invest or what might happen if we had a significant downturn of the nature of early 2000s or after the global financial crisis.
In future, I think I’ll just point people to this. It’s a very solid read, but it’s not only a thoughtful thesis; it draws on quite a range of historical experiences.
