Why experts warn of a trillion-dollar AI bubble

Fears of a growing artificial intelligence (AI) bubble are intensifying as global tech firms pour significant sums into advanced chips, data centres and large-scale computing infrastructure.

With spending now projected to cross the trillion-dollar threshold, many experts have warned that the AI bubble could be larger and riskier than anything the tech sector has seen before.

Analysts noted that this acceleration, fuelled by the explosive rise of systems like ChatGPT, Gemini and Claude, has created conditions ripe for a speculative surge reminiscent of the late-90s dot-com frenzy.

Executives across Silicon Valley are committing unprecedented capital to ensure they aren’t left behind in what’s predicted to be a massive shift of economic activity from humans to machines.

That said, much of this investment is backed by venture capital, aggressive debt positions and increasingly unconventional circular financing structures that have raised alarms on Wall Street.

Notably, industry insiders who believe in AI’s long-term promise admit privately that valuations are overheating.

Critics noted that despite the hype, the economic payoff from AI remains unproven.

The technology is still struggling to show sustainable profitability, even as competition forces companies to continue spending at breakneck speed to avoid being outscaled by rivals.

With technology stocks experiencing sharp swings in recent weeks, experts argued that the AI bubble may already be showing early signs of strain.