Jeff Bezos Warns of AI 'Industrial Bubble', Predicts Long-Term Societal Benefits

Bezos Says AI Spending Boom Is a Bubble That Will Pay Off

Amazon.com Inc. Chairman Jeff Bezos said that the spending on artificial intelligence resembles an "industrial bubble" that could lead to lost investment but will also make society better off. "When people get very excited, as they are today about artificial intelligence for example, is every experiment gets funded, every company gets funded, the good ideas and the bad ideas," Bezos said, pointing to companies getting billions of dollars of funding before they have a product. "Investors have a hard time in the middle of this excitement distinguishing between the good ideas and the bad ideas."

Jeff Bezos says AI is in an 'industrial bubble' but society to get 'gigantic' benefits from the tech

TURIN, Italy -- Artificial intelligence is currently in an "industrial bubble" but the technology is "real" and will bring big benefits to society, Amazon Founder Jeff Bezos said on Friday. The term bubble usually refers to a period of inflated stock prices or valuations of companies that have disconnected from the fundamentals of a business. One of the most famous bubbles that burst was the 2000 dotcom crash where the value of internet companies plummeted. Exor CEO John Elkann asked Bezos on stage at Italian Tech Week in Turin, Italy whether there were signs that the current AI industry is in bubble. "This is a kind of industrial bubble," the Amazon founder said. Bezos laid out some of the key characteristics of bubbles, noting that when they happen, stock prices are "disconnected from the fundamentals" of a business. "The second thing that happens is that people get very excited like they are today about artificial intelligence," Bezos added. During bubbles, every experiment or idea gets funded, he told the audience. "The good ideas and the bad ideas. And investors have a hard time in the middle of this excitement, distinguishing between the good ideas and the bad ideas. And that's also probably happening today," Bezos said. "But that doesn't mean anything that is happening isn't real. AI is real, and it is going to change every industry."

Bezos says 'industrial bubble' in AI could benefit society

Amazon founder Jeff Bezos suggested Friday that there is a bubble in the artificial intelligence (AI) market but argued this could ultimately benefit society. During an appearance at Italian Tech Week, the billionaire sought to distinguish between what he described as an "industrial bubble" and other niche areas in the stock market. "This is a kind of industrial bubble, as opposed to financial bubbles," Bezos said in a conversation with Ferrari chair John Elkann in Turin, Italy. "The ones that are industrial are not nearly as bad," he continued. "It could even be good because when the dust settles and you see who are the winners, society benefits from those inventions." He pointed to a bubble that formed in the biotechnology industry in the 1990s, noting that investors "all lost money" when it burst but society ultimately received several lifesaving drugs as a result. "That's what's going to happen here too," Bezos said. "This is real. The benefits to society from AI are going to be gigantic." Stock market bubbles form when share prices rapidly increase in a way that is disconnected from their underlying value. Many have raised concerns that the AI boom is fueling a bubble, as tech companies see massive growth even though AI investments have yet to show real returns. "[The] thing that happens when people get very excited, as they are today about artificial intelligence for example, is every experiment gets funded, every company gets funded," Bezos noted. "Investors have a hard time in the middle of this excitement distinguishing between the good ideas and the bad ideas. And so, that's probably also happening today," he added. OpenAI CEO Sam Altman has similarly suggested the AI market is in a bubble, drawing comparisons with the dot-com bubble that burst in 2000. "When bubbles happen, smart people get overexcited about a kernel of truth," Altman reportedly said in August. "If you look at most of the bubbles in history, like the tech bubble, there was a real thing. Tech was really important. The internet was a really big deal. People got overexcited." "Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes," he added at the time. "Is AI the most important thing to happen in a very long time? My opinion is also yes."

Jeff Bezos Explains Why the AI Bubble Exists, and What's Going to Happen When It Bursts

Research firm MacroStrategy Partnership claims that the AI bubble is 17 times the size of the dot-com bubble, per MarketWatch. Jeff Bezos thinks AI technology is in an "industrial bubble." On Friday at Italian Tech Week in Turin, Italy, Bezos said that the hype and investment currently defining the sector are bigger than the proven profitability of all of the companies within it, CNBC reported. "People get very excited, like they are today, about artificial intelligence," Bezos said at the event. Related: OpenAI CEO Sam Altman Thinks We're in an AI Bubble Because Investors Are 'Overexcited' About Artificial Intelligence Bezos said that bubbles happen when stock prices are "disconnected" from the core of a business, and become overinflated compared to what's produced. So valuations rise much higher than what those companies are actually worth. In the infamous dot-com crash in the early 2000s, Internet-based companies attracted investments, despite not making a profit or having viable business plans. When reality set in, the market crashed, leading to significant losses for investors and bankruptcies for many startups. Bezos explained that during a boom, every experiment or idea ends up getting funded because investors "have a hard time" choosing good ideas over lackluster ones during the excitement. Still, Bezos said that industrial bubbles are "not nearly as bad" because the underlying technology developed in one can benefit society -- even when the bubble bursts. He gave the example of the biotech and pharmaceutical bubble of the 1990s, which resulted in the creation of life-saving medicines, even though some companies went under. "When the dust settles and you see who the winners [are], societies benefit from those inventions," Bezos said. "That is what is going to happen here, too. This is real, the benefits to society from AI are going to be gigantic." Meanwhile, AI startups are receiving more money now than ever. PitchBook data shows that AI startups raised $104.3 billion in the U.S. in the first half of 2025, almost as much as all startups raised the entire previous year. Related: Jeff Bezos Sold Billions Worth of Amazon Stock Bezos isn't the only tech billionaire cautioning about an AI bubble -- OpenAI CEO Sam Altman, whose company was just valued at $500 billion, the highest for any private company ever, said in August at a press dinner that he thinks "investors as a whole are overexcited about AI," leading to overfunding. Further, research firm MacroStrategy Partnership claims that the AI bubble is 17 times the size of the dot-com bubble and four times as big as the 2008 real estate one, per MarketWatch.