OpenAI’s CEO Sam Altman recently warned investors, arguing that excitement around AI is leading to potential bubbles in stock valuations. While he mentions that the term “bubble” should be avoided, many analysts question whether AI companies, like OpenAI, are overvalued. Historically, bubbles arise when assets have little fundamental worth, as seen in the Dutch tulip mania and the 2008 financial crisis. However, OpenAI boasts approximately $13 billion in annual recurring revenue and significant user growth, indicating a legitimate business. While AI isn’t fundamentally worthless, there’s concern over the high valuations of tech stocks, particularly the “Magnificent Seven” companies that dominate market value. Analysts note that excessive growth in tech stocks could lead to a market correction. Despite these worries, OpenAI’s valuation reflects real business potential, suggesting that while the tech sector may be technically overvalued, it doesn’t compare to past economic bubbles.
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