Amazon founder Jeff Bezos has confirmed that the current AI boom is indeed a bubble, but emphasized that its societal impact will be substantial. Speaking at Italian Tech Week in Turin, Italy, Bezos said, “This is a kind of industrial bubble, as opposed to financial bubbles. It can even be good, because when the dust settles and you see who are the winners, societies benefit from those investors.”

He added, “The benefits to society from AI are going to be gigantic,” highlighting the transformative potential of artificial intelligence despite inflated tech valuations.

A tech bubble occurs when company stock prices and valuations rise far beyond their actual business performance. The dot-com bubble of the early 2000s is a classic example. However, analysts note that the current AI bubble differs because it is anchored by key players such as Nvidia, whose AI chips power the infrastructure, and OpenAI, the startup behind popular tools like ChatGPT.

Big Tech’s AI Spending and Investments

Major technology companies are investing billions into AI chips, data centers, and infrastructure to stay competitive in the AI race. With more individuals and businesses adopting AI tools, companies are racing to build robust AI ecosystems capable of shifting numerous human tasks to machines.

To fund these massive projects, Big Tech is increasingly turning to private investors. Yet the question remains: how will companies recoup the trillions of dollars in investments and debt accumulated for AI development?

OpenAI CEO Sam Altman also warned of an AI bubble in August, alongside the announcement of a $500 billion AI infrastructure project called Stargate. Meta, Google, Microsoft, and Oracle have similarly ramped up AI spending, with Meta seeking $29 billion via private capital for AI data centers and Oracle issuing $18 billion in debt for infrastructure expansion.

Recently, OpenAI partnered with Nvidia to invest $100 billion into data center buildouts, further highlighting the scale of AI investments driving the industry.

Despite concerns over high valuations, Bezos remains optimistic about AI’s long-term benefits, suggesting that while some companies may falter, the winners will deliver significant societal value.