Recently, the AI frenzy has driven the share prices of technology companies to record highs. This surge has pushed the valuations of numerous AI firms to unprecedented levels. According to Fortune magazine, some companies have attracted massive capital flows primarily due to their potential to deliver transformative impacts on the global socio-economic landscape, rather than on actual profits.
Moreover, tech giants such as OpenAI, Meta and Microsoft are investing hundreds of billions of US dollars in building data centres and developing advanced chips. These investments are seen as necessary steps to ensure companies are not left behind in today’s fierce technology race, and they are decisive factors in determining winners and losers in the next phase of development. However, if profits fail to meet expectations, such vast investments could expose companies to significant financial risks.
Consequently, analysts worry that an AI bubble is forming and could burst at any time. The meteoric rise in AI stock prices has drawn comparisons to the dot-com bubble of the late 1990s and the early 2000s. At that time, the share prices of internet-based technology companies rose rapidly before collapsing sharply. That collapse triggered waves of bankruptcies, leaving many workers struggling after losing their jobs.
Kristalina Georgieva, Managing Director of the International Monetary Fund, has warned that current technology stock valuations are approaching levels seen 25 years ago when the dot-com bubble collapsed. Should history repeat itself, a burst AI bubble could trigger a market shock and push the economy into recession. Developing countries could be particularly vulnerable. Google CEO Sundar Pichai cautioned that no company would be immune if such a scenario were to occur.
Despite these warnings, many experts remain optimistic about the AI market’s growth prospects and the benefits the technology can bring to the economy. According to US financial analytics firm CFRA, unlike the dot-com era when most capital went to fledgling internet companies with opaque business models, the rise of today’s AI corporations is built on solid foundations. Technology companies have gradually brought AI from a distant concept into everyday life, with wide-ranging applications in factories, hospitals, and government.
Specific business activities, such as chip production, are also generating enormous profits. For example, Nvidia, a leading US chip manufacturer, recently reported an impressive revenue of 57 billion USD in the third quarter of 2025, up 62% compared to the same period in 2024, surpassing Wall Street expectations. Nvidia’s performance, seen as a benchmark for the AI value chain, has helped ease some concerns about a potential global bubble.
The AI market is still in its infancy, with vast potential for growth. Professor Kim Sung-Soo of Yonsei University (Republic of Korea) stated that, in the digital technology era, many countries are focusing on building new infrastructure and data centres. Therefore, in the near term, the momentum of technology companies is unlikely to wane. It will likely take time to confirm that the world is entering an era of AI explosion rather than approaching the point of an AI bubble bursting. Nevertheless, rather than worrying about the risks, companies and nations must swiftly master AI technology to gain an advantage in the development race over the coming decades.
