A growing number of experts warn that the rapidly expanding artificial intelligence (AI) market is forming a bubble, which could lead to a significant crash in the near future.
The recent release of GPT-5 by OpenAI has sparked widespread disappointment among investors, with some calling it “underwhelming.” However, Gary Marcus, a cognitive scientist and longtime AI researcher, believes that this was just the beginning. He warned of the limits of large language models (LLMs) since 2019 and predicted a potential bubble in 2023.
Marcus attributes the current market wobble to GPT-5’s failure to meet expectations, saying it has “woken up” many investors. However, he emphasizes that this is not a complete collapse but rather an underwhelming experience. The AI boom has largely transformed tech stocks into AI stocks, causing nerves and concerns about the market.
Recent surveys suggest that nearly 95% of generative AI pilots at companies are failing. This growing concern has led to a massive sell-off in the stock market, with investors worried about the value of tech stocks that have become increasingly dominated by AI stocks.
Marcus cites several warning signs, including the massive spending on data centers to support future demand for AI use and former Google CEO Eric Schmidt’s recent warning that achieving artificial general intelligence (AGI) is uncertain. He also points out that nearly 500 AI unicorns are valued at $2.7 trillion, which he believes is unsustainable.
Despite these concerns, some experts remain optimistic about the potential benefits of AI. However, others, like Gary Marcus, warn that investors should be cautious and not get caught up in the hype. The market may be due for a correction, but Marcus emphasizes that this could lead to significant long-term gains once the dust settles.
Historically, AI has followed a pattern similar to previous technological revolutions, with periods of rapid growth, dramatic crashes, and eventual durable value realization. As Wall Street banks cautiously approach the issue, it remains to be seen whether investors will heed Marcus’s warnings or continue to ride the AI wave.
Source: https://fortune.com/2025/08/24/is-ai-a-bubble-market-crash-gary-marcus-openai-gpt5