I often get asked whether I think AI is a bubble. Usually because I work in an AI-native company. I took Andrew Ng’s ...

I often get asked whether I think AI is a bubble. Usually because I work in an AI-native company. I took Andrew Ng’s machine learning course back when he still used Octave, and started experimenting with agentic frameworks 2 years ago. My primary thought: this is a revolution and we don’t yet know what the effects will be. No, “AI” is not a bubble. But… Yes, there is an AI bubble. The bubble isn’t inherent to the technology; the allocation of capital is in line with the potential. The transformer revolution has irrevocably changed the scope of what we can use digital computers to do. The capex spent on GPUs and data centers is questionable in cases, but we’re encountering some (healthy) limits on growth and I am optimistic we’ll make use of any spare computing power. We’re just scratching the surface of what’s possible with inference, and training will continue being critical for businesses even if open-weight models provide a capable enough foundation. The bubble I see is opinions…