OpenAI CEO Sam Altman acknowledged that the company’s artificial intelligence (AI) is in a “bubble,” with “insane” valuations and irrational investor behavior. However, he believes this is a typical phase in tech’s boom-bust cycle and that the long-term societal upside of AI will outweigh the froth.
Altman pointed out that startups with little more than a pitch deck are raising hundreds of millions of dollars in funding, and valuations have become “out of control.” Despite these concerns, he is ready to continue spending on infrastructure, including datacenter construction, which he expects to cost trillions of dollars in the near future.
Altman stated that OpenAI is already looking beyond Microsoft Azure’s cloud capacity and is shopping around for more. The company signed a deal with Google Cloud this spring and plans to take as much compute as it can, despite the limitations of any one hyperscaler’s offerings.
The tech industry’s biggest names have also raised capital expenditure guidance to keep pace with AI demand. Microsoft is now targeting $120 billion in full-year capital expenditures, Amazon is topping $100 billion, Alphabet is raising its forecast to $85 billion, and Meta is lifting the high end of its capex range to $72 billion.
Analysts say that the surge in AI infrastructure spending is a validation moment for the sector. However, concerns about overheating have been mounting, with Alibaba co-founder Joe Tsai warning of an AI bubble in the US.
Altman views these cycles as part of the natural rhythm of technological progress. He expects AI to follow a similar path: a few high-profile wipeouts, followed by a lasting transformation. Despite the risks, Altman believes that the value created by AI for society will be tremendous.
Source: https://www.cnbc.com/2025/08/18/altman-ai-bubble-openai.html