Eric Schmidt explains why he doesn't think AI is a bubble — even if it might look like it

Eric Schmidt, the former CEO of Google, has shared his perspective on the future of artificial intelligence, dismissing concerns that the industry is experiencing a bubble similar to the dot-com crash. Speaking at the RAISE Summit in Paris, Schmidt emphasized the resilience of the AI sector, which has seen remarkable growth since the advent of ChatGPT and substantial investments from major tech companies. With the AI market valued at approximately $189 billion in 2023, projections suggest it could surge to a staggering $4.8 trillion by 2033. While some analysts warn of a potential downturn, Schmidt, who has vested interests in several AI firms, including Anthropic, pointed to the robust demand for hardware and chips as evidence of the industry’s sustainability. Schmidt noted, "You have these massive data centers, and Nvidia is quite happy to sell them all the chips. I've never seen a situation where hardware capacity was not taken up by software." He acknowledged conversations with AI executives who express concerns about potential overbuilding and overcapacity in the coming years, yet he remained cautious about labeling the industry as being in a bubble. "If you believe that those are going to be the defining aspects of humanity, then it's under-hyped and we need even more," Schmidt remarked, highlighting the diverse opinions within the tech community regarding the future of AI. Despite his optimism, the debate continues, especially on Wall Street, where some experts, like Apollo Global Management's chief economist Torsten Sløk, argue that the current market could be facing an even larger bubble than the one seen in the 1990s. Sløk pointed out that the top 10 companies in today’s S&P 500 are significantly more overvalued than during the tech boom, casting a shadow over the AI industry's prospects.