AI Boom Could Lead to Losses, Warns OpenAI's Sam Altman

Sam Altman, the head of OpenAI, is raising a red flag about the skyrocketing excitement around artificial intelligence (AI).

In a recent chat with reporters, he compared the current AI craze to the dot-com bubble of the late 1990s, warning that some investors might lose big due to overhyped expectations.  “Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes,” Altman said, according to The Verge.

Altman, whose company kicked off the generative AI wave with ChatGPT, pointed out that the frenzy feels a lot like the dot-com days, when internet startups were valued at insane amounts before crashing hard in 2000, tanking nearly 80% of the Nasdaq’s value. “When bubbles happen, smart people get overexcited about a kernel of truth,” he explained. While he believes AI is a game-changer, he thinks valuations for startups with just an idea and a small team are getting out of hand.

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Still, Altman’s not all doom and gloom. He’s bullish on AI’s future, calling it “one of the biggest breakthroughs in ages.” OpenAI is pushing forward, planning to pour trillions into building data centers to keep up with demand. The company, already valued at $300 billion after a $40 billion funding round in March, is said to be eyeing a $6 billion stock sale that could boost its worth to $500 billion.

Others in the industry share Altman’s worries. Alibaba’s Joe Tsai and Bridgewater’s Ray Dalio have also flagged concerns about overvalued AI ventures. A Goldman Sachs report recently questioned whether AI investments will pay off. Meanwhile, Chinese startup DeepSeek made headlines by training an AI model for just $6 million, showing how competition and costs vary widely.

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Altman’s warning is a reality check for the AI world. While the tech holds incredible promise, the current hype could lead to a rough landing, much like the dot-com bust.