"When people get rich quick, a whole bunch of people come in and want to get rich too, and that's why we end up with bubbles. One day we're going to have an AI reset, because waves create bubbles, because interlopers come in."
"The AI boom is following the pattern of other eras of technological growth, in which early gains for some tech firms have sparked a wave of spending that will ultimately be unsustainable for dozens of companies. Companies will soon have to curtail their spending and revise their valuations, or otherwise risk failing."
"This wave of AI spending is set to exceed the capital expenditure-to-sales ratio from the dot-com era as a result of hyperscalers pouring money into data centers used to train and deploy vast large language models and other AI systems, with capex-to-sales reaching 34% this year and 37% in 2028."
The AI boom generated $2.2 trillion in wealth for the world's 500 richest people in 2025, but venture capitalist Bill Gurley warns this represents an inflating bubble following historical patterns of technological booms. Early gains attract numerous competitors and unsustainable spending waves that eventually force companies to curtail investments and revise valuations or face failure. Current AI capital expenditure-to-sales ratios exceed dot-com era levels, with hyperscalers investing heavily in data centers. Gurley predicts an inevitable AI reset will occur, after which software-as-a-service stocks—heavily disrupted by AI automation—present investment opportunities. The excessive spending on AI infrastructure signals an approaching market correction.
Read at Fortune
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