AI bubble

Ars Live: Is the AI bubble about to pop? A live chat with Ed Zitron.

As generative AI has taken off since ChatGPT’s debut, inspiring hundreds of billions of dollars in investments and infrastructure developments, the top question on many people’s minds has been: Is generative AI a bubble, and if so, when will it pop?

To help us potentially answer that question, I’ll be hosting a live conversation with prominent AI critic Ed Zitron on October 7 at 3: 30 pm ET as part of the Ars Live series. As Ars Technica’s senior AI reporter, I’ve been tracking both the explosive growth of this industry and the mounting skepticism about its sustainability.

You can watch the discussion live on YouTube when the time comes.

Zitron is the host of the Better Offline podcast and CEO of EZPR, a media relations company. He writes the newsletter Where’s Your Ed At, where he frequently dissects OpenAI’s finances and questions the actual utility of current AI products. His recent posts have examined whether companies are losing money on AI investments, the economics of GPU rentals, OpenAI’s trillion-dollar funding needs, and what he calls “The Subprime AI Crisis.”

Alt text for this image: — Credit: Ars Technica

During our conversation, we’ll dig into whether the current AI investment frenzy matches the actual business value being created, what happens when companies realize their AI spending isn’t generating returns, and whether we’re seeing signs of a peak in the current AI hype cycle. We’ll also discuss what it’s like to be a prominent and sometimes controversial AI critic amid the drumbeat of AI mania in the tech industry.

While Ed and I don’t see eye to eye on everything, his sharp criticism of the AI industry’s excesses should make for an engaging discussion about one of tech’s most consequential questions right now.

Please join us for what should be a lively conversation about the sustainability of the current AI boom.

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Is the AI bubble about to pop? Sam Altman is prepared either way.

AI, AI bubble, AI development, AI economics, AI implementation, AI research, AI valuations, Amazon, Anthropic, Biz & IT, chatgpt, enterprise AI, Google, GPT-5, machine learning, Meta, microsoft, MIT, openai, palantir, sam altman / Shannon Garcia / August 22, 2025

Still, the coincidence between Altman’s statement and the MIT report reportedly spooked tech stock investors earlier in the week, who have already been watching AI valuations climb to extraordinary heights. Palantir trades at 280 times forward earnings. During the dot-com peak, ratios of 30 to 40 times earnings marked bubble territory.

The apparent contradiction in Altman’s overall message is notable. This isn’t how you’d expect a tech executive to talk when they believe their industry faces imminent collapse. While warning about a bubble, he’s simultaneously seeking a valuation that would make OpenAI worth more than Walmart or ExxonMobil—companies with actual profits. OpenAI hit $1 billion in monthly revenue in July but is reportedly heading toward a $5 billion annual loss. So what’s going on here?

Looking at Altman’s statements over time reveals a potential multi-level strategy. He likes to talk big. In February 2024, he reportedly sought an audacious $5 trillion–7 trillion for AI chip fabrication—larger than the entire semiconductor industry—effectively normalizing astronomical numbers in AI discussions.

By August 2025, while warning of a bubble where someone will lose a “phenomenal amount of money,” he casually mentioned that OpenAI would “spend trillions on datacenter construction” and serve “billions daily.” This creates urgency while potentially insulating OpenAI from criticism—acknowledging the bubble exists while positioning his company’s infrastructure spending as different and necessary. When economists raised concerns, Altman dismissed them by saying, “Let us do our thing,” framing trillion-dollar investments as inevitable for human progress while making OpenAI’s $500 billion valuation seem almost small by comparison.

This dual messaging—catastrophic warnings paired with trillion-dollar ambitions—might seem contradictory, but it makes more sense when you consider the unique structure of today’s AI market, which is absolutely flush with cash.

A different kind of bubble

The current AI investment cycle differs from previous technology bubbles. Unlike dot-com era startups that burned through venture capital with no path to profitability, the largest AI investors—Microsoft, Google, Meta, and Amazon—generate hundreds of billions of dollars in annual profits from their core businesses.

Is the AI bubble about to pop? Sam Altman is prepared either way. Read More »