The global investment in artificial-intelligence companies has soared to roughly $500 billion, fueling a surge in valuations and sparking comparisons to past tech manias like the dot-com era.

However, some analysts argue this may all be “one big AI bubble,” pointing to three different reasons — from circular investment to overvaluation of AI companies’ overall worth. Let’s break it down.

Circular financing

Tech companies investing in other tech companies is fueling much of the boom. Firms, from Microsoft to Meta, and Amazon to OpenAI, Anthropic, and others, are increasingly handing over billions of dollars to prop each other up in ways that many analysts say are resulting in synthetic growth, while organic growth and real customer demand for actual products have slowed.

For instance, o

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