Sam Altman Warns AI Stocks May Be in a Dot-Com Style Bubble
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He compared the moment to the dot-com boom of the late 1990s. That period drove up stock prices for internet firms that often had no clear revenue path. When the market corrected, the Nasdaq lost nearly 80% of its value between March 2000 and October 2002. Altman suggested that today's excitement in artificial intelligence looks similar in some ways.
AI valuations echo dot-com era risks
His remarks come as more experts warn that valuations are running ahead of fundamentals. Alibaba (BABA) co-founder Joe Tsai, Bridgewater Associates founder Ray Dalio, and Apollo Global Management (APO) chief economist Torsten Slok have all voiced similar concerns. Last month, Slok wrote that the current market for artificial intelligence may even be a larger bubble than the internet era, pointing to valuations in the top 10 companies in the S&P 500 (SPY).
According to Altman, the biggest risk is that money is flowing into firms with very little substance. He noted that startups with just 'three people and an idea' are landing large sums and sky-high valuations. Altman also warned that investors are likely to see losses when the market corrects. He pointed out that many firms will not survive once the focus shifts back to profits and sustainable growth. In his view, the hype around artificial intelligence is ahead of the actual business models and realistic valuations, much like the internet cycle in the 1990s.
Still, Altman sees a mixed outcome. He said there will be both winners and losers. Some investors will lose large sums, while others will make significant gains. He called the likely result a 'huge net win' for the economy, even if the path there is uneven. His advice to startups and investors is simple. Focus on fundamentals, not momentum. That lesson, he said, remains as relevant today as it was after the dot-com crash.
Using TipRanks' Comparison Tool, we lined up notable AI stocks to give investors a clear view of each company and the broader industry.
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