Executives Express Concern Over Overheated Market Despite Strong Long-Term Demand
LISBON, Portugal — Top technology executives are expressing growing concern about the possibility of a bubble forming in the artificial intelligence (AI) sector, highlighting industry-wide unease as company valuations surge to unprecedented levels.
In recent weeks, financial markets have begun to question whether too much capital is flooding into the AI boom. Investors are worried that revenue forecasts and profit expectations may not justify the skyrocketing valuations of AI companies.
Until now, much of the caution has come from financial leaders. Goldman Sachs CEO David Solomon and Morgan Stanley CEO Ted Pick have warned about potential market corrections. The alarm was amplified this week by legendary “Big Short” investor Michael Burry, who accused major AI infrastructure and cloud companies — or “hyperscalers” — of understating chip depreciation costs. Burry suggested that profits reported by firms like Oracle and Meta may be significantly overstated. He recently disclosed put options against Nvidia and Palantir.
However, this week at the Web Summit in Lisbon, AI company CEOs themselves openly shared similar concerns.
DeepL CEO Jarek Kutylowski told CNBC, “I think the valuations are pretty exaggerated here and there, and I think there are signs of a bubble on the horizon.”
Picsart CEO Hovhannes Avoyan echoed the sentiment, saying many AI startups are raising money at extremely high valuations “without any revenue,” calling it a growing concern. Some startups, he said, are being valued on “vibe revenue” — a term referring to companies backed despite having little to no actual sales.
Optimism Remains Strong for Long-Term AI Growth
Despite warnings about inflated valuations, tech leaders remain highly optimistic about the long-term potential of AI.
Lyft CEO David Risher said that while the financial market is clearly in a bubble, the underlying technology remains transformative.
“Let’s be clear, we are absolutely in a financial bubble. No question. But no one wants to be left behind.”
He added that while the financial market is risky, the long-term industrial outlook for AI remains bright due to its ability to dramatically improve efficiency and everyday life.
Executives also weighed in on the demand outlook for 2026. Kutylowski said interest is strong, with businesses aware of AI’s potential — but noted that many companies are still struggling to adopt it effectively.
DeepL recently expanded from AI translation into general-purpose AI “agents” that can carry out employee tasks automatically.
Cohere CFO Francois Chadwick confirmed that enterprise demand is “definitely there.”
A Massive $4 Trillion AI Infrastructure Buildout Is Underway
Even with uncertainty around valuations, investment in AI infrastructure continues to accelerate.
According to a report from venture capital firm Accel, global AI data center capacity is expected to reach 117 gigawatts by 2030, requiring $4 trillion in capital expenditure over the next five years. Roughly $3.1 trillion in revenue will be needed to recoup that investment.
Major companies, including Nvidia and OpenAI, have already announced multi-billion-dollar infrastructure deals this year to expand global data center capacity.
Accel partner Philippe Botteri said three major forces will drive the revenue needed to support the investment:
- More powerful and compute-intensive AI models
- Growth of new AI-based services
- The rise of “agentic” AI — tools that can automatically perform tasks for users