Altman Agrees the AI Market is a 'Bubble' That Could Soon Burst

OpenAI chief Sam Altman has agreed with remarks by prominent business people and analysts that investors have got too excited about the economic potential of artificial intelligence, a new report says.

In an interview with The Verge and other reporters last week, the American played a straight bat about the stock market’s excitement about AI.

“Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes,” he was quoted as saying by CNBC.

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Torsten Slok, the chief economist of Apollo Global Management, warned in mid-July that “the AI bubble today is that the top 10 companies in the S&P 500 today are more overvalued than they were in the 1990s.”

Others appear to agree with him.

Alibaba co-founder Joe Tsai warned of an AI bubble back in March at an investment conference in Hong Kong, while similar remarks have been made by Ray Dalio, the founder of Bridgewater Associates, one of the world’s top hedge funds, who has expressed doubt on whether the benefits from AI will come quickly and questioned if the benefits will outweigh potentially very serious negative impacts.

The latest remarks have received a lot attention because Sam Altman is a leading figure in the development of artificial intelligence.

“When bubbles happen, smart people get overexcited about a kernel of truth. If you look at most of the bubbles in history, like the tech bubble, there was a real thing. Tech was really important. The internet was a really big deal. [But] people got overexcited,” Altman said, according to The Verge’s Emma Roth.

But he thought it was “insane” and “not rational” that some AI startups – “three people and an idea” – were getting high fund valuations.

He reportedly named several AI startups by former OpenAI personnel who were able to raise billions of dollars, saying people were going to get burned.

“Someone is going to lose a phenomenal amount of money. We don’t know who, and a lot of people are going to make a phenomenal amount of money,” he said. “My personal belief, although I may turn out to be wrong, is that, on the whole, this would be a huge net win for the economy.”

However, the American noted that his company would “spend trillions of dollars on data centre construction in the not very distant future,” adding that “you should expect a bunch of economists to wring their hands.”

GPT-5 disappoints

Meanwhile, OpenAI’s latest model GPT-5 appears to have disappointed a bunch of pundits, who felt underwhelmed – as The Verge said, it “failed the hype test.”

In a report in The Conversation, one professor noted that Sam Altman “claims GPT-5 is better at writing computer code than its predecessors. It is said to ‘hallucinate’ a bit less, and is a bit better at following instructions – especially when they require following multiple steps and using other software.

“The model is also apparently safer and less ‘sycophantic’, because it will not deceive the user or provide potentially harmful information just to please them.

“Altman does say that ‘GPT-5 is the first time that it really feels like talking to an expert in any topic, like a PhD-level expert.” Yet it still doesn’t have a clue about whether anything it says is accurate, as you can see from its attempt below to draw a map of North America.”

In other words, it’s still a work in progress. We’ll leave it at that.