Eric Schmidt, former CEO of Google and an investor in AI firms like Anthropic and Perplexity, has dismissed comparisons between the current AI wave and the dot-com bubble. Since the launch of ChatGPT in late 2022, massive investments have flowed into AI, with major tech companies treating it as the next major platform shift.
However, some experts have warned of overvaluation. Apollo Global Management’s Chief Economist, Torsten Slok, has claimed that leading AI stocks are trading at valuations even higher than those seen during the dot-com era. Joe Tsai, Chair of Alibaba Group, has echoed similar concerns, suggesting a bubble may be forming.
Schmidt disagrees. At the RAISE summit in Paris, he said the AI sector is backed by physical growth in infrastructure, especially the surge in data centres using Nvidia’s chips. He acknowledged that many executives believe there may be short-term overcapacity, but each believes their own company will survive while others may not — a typical feature of speculative periods.
Still, Schmidt argued that what sets this moment apart is that demand for hardware is being matched by real software development and deployment. “I’ve never seen a situation where hardware capacity was not taken up by software,” he said, highlighting that the sector is already delivering utility.
He added that, in his experience, this is not a bubble. Instead, it reflects the early stages of a major industrial shift.
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