Why OpenAI board chair Bret Taylor thinks AI is in a bubble

OpenAI board chair Bret Taylor believes AI is in a bubble, but says that does not undermine its long-term potential. Comparing it to the dot-com era, he argued that short-term losses will not prevent AI from creating lasting economic value.

Ayush Mukherjee

September 15, 2025 / 18:25 IST

Artificial Intelligence

Bret Taylor, board chair at OpenAI and CEO of AI agent startup Sierra, has acknowledged that artificial intelligence is currently in a bubble — but insists that does not necessarily spell doom.

Speaking in an interview with The Verge, Taylor was asked whether he agreed with OpenAI CEO Sam Altman’s earlier comment that “someone is going to lose a phenomenal amount of money in AI.” Taylor said both Altman’s warning and his optimism about AI’s long-term impact can be true at the same time.

“I think it is both true that AI will transform the economy, and I think it will, like the internet, create huge amounts of economic value in the future,” Taylor explained. “I think we’re also in a bubble, and a lot of people will lose a lot of money. I think both are absolutely true at the same time, and there’s a lot of historical precedent for both of those things being true at the same time.”

Taylor drew a parallel between today’s AI sector and the dot-com boom of the late 1990s. While many internet startups collapsed when the bubble burst, the core idea of the internet transforming industries proved accurate. He suggested AI is at a similar stage, where hype and overspending will eventually shake out weaker players, but the underlying technology will still create lasting value.

His comments echo a growing industry sentiment: that the current AI gold rush may be unsustainable in the short term but is paving the way for long-term transformation. Much like the internet two decades ago, artificial intelligence could reshape how businesses operate, how people work, and how economies grow — even if some investors lose money along the way.