The fear of an AI bubble with what some experts such as Michael Burry consider the sector’s overblown valuation has been gripping the market for weeks, culminating in a large tech stock sell-off on Thursday, November 20, when the NASDAQ and S&P 500 saw their lowest close numbers since early September.
Mixed U.S. jobs data further muddied the water, diminishing hopes of further Fed cuts this year, just as Nvidia’s (NASDAQ: NVDA) blockbuster quarterly earnings failed to dispel the fears about an inevitable bust.
To assess the state of affairs from yet another angle, Finbold asked OpenAI’s most sophisticated chatbot, ChatGPT 5, whether the so-called ‘AI bubble’ will burst by the end of 2025.
ChatGPT analyzes the AI bubble
Reviewing the available market data and investor reaction in the past couple of days, the large language model (LLM) argued that the worries about the AI sector are overheated but not entirely hollow.
Namely, while valuations appear stretched across some chipmakers, cloud providers, and model developers, ChatGPT believes their fundamentals still remain sufficiently strong to avoid a disaster, such as the dot-com era crash.
The LLM noted that many of the leading AI-aligned companies are generating real revenue, especially those tied to data-center demand and enterprise adoption, as witnessed by Nvidia’s performance last quarter.
Likewise, the model mentioned the staggering capital deployment in AI infrastructure as a signal that the momentum is not yet fading. Nonetheless, it also warned that the more long-term prospects are up for debate, thus agreeing with figures such as Intel CEO Pat Gelsinger, who stated last month that the bubble pop may still be “several years” away.
Still, some of the risks are hard to ignore, even short-term. For instance, ChatGPT reminded that a number of analysts at major central banks and notable figures in the industry have flagged valuation excesses reminiscent of the early 2000s. This is certainly true in the case of the so-called ‘Big Short’ investor Michael Burry, who bet over $1 billion against the sector a few weeks ago.
Will the AI bubble burst in 2025?
Overall, the model places the probability of a “sharp correction” before the end of 2025 at roughly 30–40%, but sees the chances of a full-blown crash as significantly lower (10–20%). Any downturn, it says, is more likely to take the form of a “reset” than a wipeout.
Will the AI bubble burst in 2025? Source: Finbold and ChatGPTKey triggers to watch in the following weeks include potentially weak earnings from AI bellwethers, lower data-center investments, and broader macroeconomic slumps brutal enough to put a significant amount of pressure on flagship tech stocks.
In short, ChatGPT sees the AI market as inflated but not fragile. In other words, a short-term pop is possible, but a correction is more likely, with dramatic implosions such as the dot-com bubble remaining a tail-risk scenario rather than the base case, at least for now.
Featured image via Shutterstock
Source: https://finbold.com/we-asked-chatgpt-will-the-ai-bubble-burst-by-end-of-2025-heres-what-it-said/
