Pat Gelsinger says we’re already in an AI bubble, but says it could be several years before anything bad happens. The former Intel CEO was asked during an interview on CNBC if we’re in an AI bubble, stating, “There’s a lot of leverage in the system, there’s a lot of cash, but then there’s a whole bunch of other folks who are trying to build these data centers. Whether there’s the energy component side of it, or whether you think about the real estate component, I mean, there’s just a whole lot of things happening at one time.”
“Are we in an AI bubble? Of course, we are. We are hyped, we’re accelerating, we’re putting enormous leverage into the system,” Gelsinger answered. “With that said, I don’t see it ending for several years. I do think we have an industry shift to AI. As Jensen (Huang) talked about, and I agree with this, you know that businesses are yet to really start materially benefiting from [it]. We’re displacing all of the internet and the service provider industry as we think about it today — we have a long way to go.”
Despite the disruption that AI has put on some industries, Gelsinger believes that we still have quite a way to go before we see the AI bubble burst. Continuing improvements in semiconductor efficiency would allow the industry to go further before running into trouble, the former CEO added, stating some changes will start materializing later in the decade. As such, he believes that nothing could change in the state of play for several years, despite radical improvements to AI he acknowledged had transpired in the last year alone.
Many experts are starting to get worried about the AI bubble, especially as companies are investing billions into the technology without seeing real returns yet. Even big institutions like the Bank of England and the International Monetary Fund are worried about it, saying we’re already halfway into a crash that could erase trillions in value. Still, tech companies continue investing and building massive data centers, like OpenAI’s planned gigawatt facility in India. These projects aren’t just costing money and energy — they’re also affecting global memory and storage supply, leading to a price crunch for just about everything that needs them.
If the AI bubble bursts, a lot of industries will be affected. While those working in the semiconductor and AI space will be hit the hardest, financial institutions would also be gravely affected — especially those that have heavily invested in companies like Nvidia and OpenAI. And while the average person might think they’re safe because they do not own stocks in these companies, their banks, pension funds, and other financial instruments likely are, causing widespread chaos if and when this happens.
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