OpenAI CEO Sam Altman warns startups of AI investment bubble

OpenAI

OpenAI CEO Sam Altman has issued a warning to the startup community, cautioning that the current surge of investment in artificial intelligence could create a bubble where “someone’s gonna get burned.” Speaking to reporters, Altman compared the present AI frenzy to the dot-com bubble of the late 1990s, when investors became overexcited by a transformative technology.

“Are we in a phase where investors as a whole are overexcited by AI? In my opinion, yes,” Altman told Bloomberg. “Is AI the most important thing to happen in a very long time? My opinion is also yes.” He acknowledged that the underlying AI technology is real and transformative, but warned that the hype surrounding it is unsustainable and will not automatically result in long-term success.

As per the Bloomberg report, Altman highlighted the extreme valuations and what he called the “irrational behaviour” of investors chasing the next big AI opportunity. Some startup valuations, he noted, are “insane,” and not every company in the AI space is built to last. He urged startups and investors to focus on fundamentals rather than momentum or hype, emphasising that companies with weak business models are likely to fail.

In addition to these warnings, Altman spoke about OpenAI’s long-term plans. The company intends to invest trillions of dollars in compute infrastructure to support its AI ambitions. Economists may label the plan as “crazy” or “reckless,” but Altman insisted that OpenAI is moving forward with its strategy. He also revealed that the company is developing a novel financial instrument to fund this massive outlay.

Altman also discussed the possibility of OpenAI going public in the future. “I do think we have to go public someday, probably,” he said, while acknowledging that he may not be the best person to serve as CEO of a public company. This signals a potential shift in leadership as the company prepares for a broader financial stage.

For context, OpenAI is already involved in the $500 billion Stargate initiative, a partnership with SoftBank and Oracle, further underscoring the scale of its ambitions in AI. Altman’s comments suggest that while AI presents enormous opportunities, startups and investors must be cautious and avoid overextending themselves in a market that is currently driven more by excitement than by sustainable business fundamentals.