AI, Big Money and the Bubble Question
Artificial intelligence is pulling in mind blowing amounts of cash, and the tech world is split on whether we are in a full blown bubble. For PC and hardware fans this matters a lot because companies like AMD and Nvidia are right at the center of the storm.
In a recent Wired interview, AMD CEO Lisa Su was asked directly if she thinks AI is a bubble. Her answer was clear and confident: emphatically no. She believes fears of an AI bubble are somewhat overstated and is more focused on how fast AMD can keep pushing innovation.
To understand why this debate is so heated it helps to look at what a bubble actually is. In simple terms a bubble happens when the price of something races far beyond its real value mostly driven by speculation and hype. That has happened before with the dot com boom and the 2008 housing crisis. The technology and houses did not vanish but the money people thought they were going to make did.
Right now AI is the latest gold rush and the GPU giants are the ones selling the picks and shovels.
AMD, Nvidia and the AI Gold Rush
Nvidia has become the poster child for the AI boom. Its valuation recently hit around 5 trillion dollars making it one of the most valuable companies on the planet. A big chunk of that comes from demand for its data center and AI focused GPUs rather than traditional gaming graphics cards.
Nvidia has also gone heavy on AI investment. It reportedly committed around 100 billion dollars to OpenAI in 2024 showing how tightly the GPU business is now tied to generative AI workloads.
AMD is not sitting on the sidelines. It signed a multi year deal with OpenAI involving huge amounts of AI GPU power worth around 6 gigawatts and a possible 10 percent stake in AMD. AMD is pushing its Instinct series like the MI355X AI superchip as a rival to Nvidia’s AI accelerators and wants a big piece of the data center and cloud AI market.
Both companies have seen their stock prices explode since 2019.
- Nvidia shares have gone from roughly 3 dollars to over 180 dollars
- AMD shares have climbed from around 30 to 40 dollars to over 200 dollars
That is fantastic news if you bought in early but it is exactly the sort of chart that makes people ask if we are in bubble territory. Are these prices backed by long term value or mostly by hype and fear of missing out on AI?
The answer depends on whether data centers and cloud providers really keep buying AI hardware at this insane pace and whether AI products actually deliver the value companies are promising.
Who Says AI Is a Bubble and Who Disagrees
Plenty of major voices in tech and finance have weighed in and they do not all agree.
- The IBM CEO argues AI is not exactly a bubble but expects serious disruption and some displacement as weaker players fall behind.
- OpenAI CEO Sam Altman warns that when bubbles happen smart people get overexcited about a kernel of truth and that someone is going to lose a phenomenal amount of money.
- A senior market analyst has claimed the AI bubble is far bigger than the dot com rush and the subprime bubble that led to the 2008 crash.
- The head of JP Morgan thinks the AI bubble will burst and says lots of money will probably be lost.
- Google’s CEO has warned that no company will be immune if the AI boom pops including Google itself.
- Former Intel CEO Pat Gelsinger says of course we are in an AI bubble but thinks it may not end for several years.
- Michael Burry the investor made famous by The Big Short has placed a one billion dollar bet against Nvidia and AI centered company Palantir clearly betting that expectations are too high.
Despite all the different opinions there is one point many of them agree on. Only a small number of companies will really win. One estimate from the IBM CEO suggests maybe two or three out of every ten companies chasing AI will actually achieve what they want. The rest will have to swallow heavy losses.
Governments are getting pulled in too. Both the United States and the United Kingdom have publicly backed AI development and want to lead in the field. At the same time Sam Altman says he is not looking for a government bailout if things turn bad and that taxpayers should not be the ones rescuing companies that make bad decisions.
What It Means for PC and Hardware Enthusiasts
For gamers and hardware fans the AI bubble debate is more than financial drama. Nvidia and AMD’s attention and research spending are shifting strongly toward AI and data center hardware. That has knock on effects for desktop GPUs pricing availability and the pace of innovation in gaming graphics.
If AI demand stays strong the money flowing into GPU research could keep pushing performance forward in both professional and gaming cards. Many of the improvements that make AI accelerators faster also benefit rendering ray tracing and compute heavy workloads that gamers and creators care about.
If it turns out to be a bubble and spending collapses some companies and projects could get cut hard. That might slow down new architectures or change how aggressively features are brought to consumer GPUs. On the other hand a cooling AI market could free up more supply for gaming cards and possibly ease prices if data center buyers are not taking every chip they can get.
Lisa Su’s view that AI is not a bubble lines up with AMD’s aggressive push into AI hardware. Nvidia is clearly betting that demand will remain enormous for years. The skeptics are not saying AI is fake but that the amount of money chasing it may be out of proportion to what will actually pay off.
In the end whether we call it a bubble or not will come down to time. If AI tools become a permanent part of every business workflow and everyday life then today’s investments might look justified. If adoption stalls or the promised gains do not materialize then those sky high GPU valuations could come crashing down.
For now AI is reshaping the GPU world and the companies that power PC gaming. As the dust settles the same hardware driving chatbots and data centers will continue to influence the performance and price of the graphics cards sitting inside gaming rigs everywhere.
Original article and image: https://www.pcgamer.com/software/ai/amds-lisa-su-doesnt-believe-theres-an-ai-bubble-emphatically-from-my-perspective-no/
