In an ongoing trend, experts often admit that artificial intelligence represents a bubble. While the discussion about the AI bubble began before OpenAI’s CEO, Sam Altman, shared his opinion, it seems that he signaled to everyone else that it’s okay to talk about it.
Altman said in his August interview with The Verge that he thinks we are in an AI bubble: “The internet was a really big deal. People got overexcited. Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes.”
Mark Zuckerberg also shared what he thinks about a possible AI bubble in an interview on the ACCESS podcast: “I do think that there’s definitely a possibility, at least empirically, based on past large infrastructure buildouts and how they led to bubbles, that something like that would happen here.”
Amazon founder Jeff Bezos has a distinct perspective on the AI bubble. “Bezos sees what’s happening now as an ‘industrial bubble’ more similar to the biotech bubble in the ’90s. While many investors lost a lot of money to that bubble, ‘We did get a couple of lifesaving drugs,’ he said,” writes Tony Owusu for TheStreet.
Former Intel CEO Pat Gelsinger, in an interview for CNBC’s Squawk Box, confirmed that he believes we are in the AI bubble by saying, “Are we in an AI bubble? Of course!” He added that he doesn’t see it ending for several years.
The time has come for Alphabet (GOOGL) CEO Sundar Pichai to join the group of experts who have expressed their opinion about the AI bubble.
Google may be insulated, but it is not immune if the AI bubble bursts.
Photo by BoliviaInteligente on Unsplash
Google CEO says no company will be immune if the AI bubble bursts
Pichai began by stating that the excitement for AI is very rational, and like Altman, Pichai compared AI to the internet bubble.
“[The internet] fundamentally changed how we work digitally as a society. I expect AI to be the same, so I think it’s both rational and there are elements of irrationality through a moment like this,” he said in an interview with the BBC.
Pichai continued to discuss what would happen if the bubble burst.
Marc Cieslak, AI correspondent, told the BBC that Google’s diverse business and huge revenue, to some extent, insulate it from some of the talk of a bubble. He added that companies like OpenAI certainly aren’t immune.
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Pichai also discussed AI hallucinations, which are another significant issue with the technology. “We take pride in the amount of work we put in to give us as accurate information as possible, but the current state-of-the-art AI technology is prone to some errors,” he said.
He continued by saying that people “have to learn to use these tools for what they’re good at, and not blindly trust everything they say.”
Bank of America analysts have also addressed the AI bubble on several occasions and have recently raised the price target for GOOGL stock.
Bank of America raises stock price target for Alphabet
In a recent research note (from October 30) shared with TheStreet, Justin Post raised his revenue estimates for Alphabet, following the earnings report for Q3 2025.
Here are the Alphabet Q3 earnings highlights:
- Revenue increased 16% to $102.3 billion year over year (15% in constant currency).
- Net income increased 33% to $34.98 billion.
- Diluted Earnings per share (EPS) increased 35% to $2.87.
Post raised the estimate for Alphabet’s 2026 net revenue by 4% to $397 billion and EPS by 4% to $11.13. For 2027, he increased his revenue estimate by 6% to $430 billion and EPS by 7% to $12.51.
He reiterated a buy rating for Alphabet stock and raised the price target from $280 to $335, based on 26 multiple his estimates for 2027 core Google GAAP EPS plus cash per share.
Post noted downside risks for Alphabet:
- Loss of search traffic to AI tools from competitors
- LLM integration taking longer than expected or negatively impacting search revenues
- Revenue pressure from compliance with the EU Digital Markets Act
- Potential for increasing capital expenditures and lower free-cash-flow due to AI investments
Related: Bank of America resets Nvidia stock forecast before earnings