Sam Altman’s AI paradox: Warning of a bubble while raising trillions
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Fortune

Sam Altman’s AI paradox: Warning of a bubble while raising trillions

August 19, 2025
05:32 PM
10 min read
AI Enhanced
investmentmoneytechnologyaimarket cyclesseasonal analysismarket

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Sam Altman says AI might be in a bubble—then touts trillions for OpenAI’s buildout. Call it the paradox powering Silicon Valley’s biggest spending spree.

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10 min read

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investment

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August 19, 2025

05:32 PM

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Fortune

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investmentmoneytechnologyaimarket cyclesseasonal analysismarket

AI·Eye on AISam Altman’s AI paradox: Warning of a bubble while raising trillionsBy Sharon GoldmanBy Sharon GoldmanAI ReporterSharon GoldmanAI ReporterSharon Goldman is an AI reporter at Fortune and co- Eye on AI, Fortune’s flagship AI

She has written digital and enterprise for over a decade.SEE FULL BIO OpenAI CEO Sam Altman (Photo: Tom Williams/CQ-Roll Call/Getty Images)Tom Williams/CQ-Roll Call/Getty ImagesWelcome to Eye on AI! AI reporter Sharon Goldman here, filling in for Jeremy Kahn

In this edition… Sam Altman’s AI paradox…AI has quietly become a fixture of advertising…Silicon Valley’s AI deals are creating zombie startups…sources say Nvidia is working on new AI chip for China that outperforms the H20

I was not invited to Sam Altman’s cozy dinner with reporters in San Francisco last week (whomp whomp), but maybe that’s for the best

I have trouble suppressing exasperated eye rolls when I hear peak Silicon Valley–ironic statements

I am not sure I could have controlled myself when the OpenAI CEO said that he believes AI could be in a “bubble,” with market conditions similar to the 1990s dotcom boom

Yes, he reportedly said, “investors as a whole are overexcited AI.” Yet, over the same meal, Altman also apparently said he expects OpenAI to spend trillions of dollars on its data center buildout in the “not very distant future,” adding that “you should expect a bunch of economists wringing their hands, saying, ‘This is so crazy, it’s so reckless,’ and we’ll just be , ‘You know what? Let us do our thing.’” Ummm…what could be more frothy than pitching a multi-trillion-dollar expansion in an industry you’ve just called a bubble? Cue an eye roll reaching the top of my head

Sure, Altman may have been referring to smaller AI startups with sky-high valuations and little to no revenue, but still, the irony is rich

It’s particularly notable given the weak GPT-5 rollout earlier this month, which was supposed to mark a leap forward but instead left many disappointed with its routing system and lack of breakthrough gress

In addition, even as Altman speaks of bubbles, OpenAI itself is raising record sums

In early August, OpenAI secured a whopping $8.3 billion in new funding at a $300 billion valuation—part of its plan to raise $40 billion this year

That figure was five times overd

On top of that, employees are now poised to sell $6 billion in s to investors SoftBank, Dragoneer, and Thrive, pushing the company’s valuation potentially up to $500 billion

OpenAI is hardly an outlier in its infrastructure binge. giants are pouring unprecedented sums into AI buildouts in 2025: Microsoft alone plans to spend $80 billion on AI data centers this fiscal year, while Meta is jecting up to $72 billion in AI and infrastructure investments

And on the fundraising front, OpenAI has company too — rivals Anthropic are chasing multibillion-dollar rounds of their own

Wall Street’s biggest bulls, Wedbush’s Dan Ives, seem unconcerned

Ives said Monday on CNBC’s “Closing Bell” that demand for AI infrastructure has grown 30% to 40% in the last months, calling the capex surge a validation moment for the sector

While he acknowledged “some froth” in parts of the market, he said the AI revolution with autonomous systems is only starting to play out and we are in the “second inning of a nine-inning game.” And while a bubble implies an eventual bursting, and all the damage that results, the underlying phenomenon causing a bubble often has real value

The advent of the web in the ’90s was revolutionary; The bubble was a reflection of the massive opportunities opening up

Still, I’d be curious if anyone pressed Altman on the AI paradox—warning of a bubble while simultaneously bragging OpenAI’s massive fundraising and spending

Perhaps over a glass of bubbly and a sugary sweet dessert? I’d also love to know if he fielded tougher questions on the other big issues looming over the company: its shift to a public benefit corporation (and what that means for the nonfit), the current state of its Microsoft partnership, and whether its mission of “AGI to benefit all of humanity” still holds now that Altman himself has said AGI “is not a super-useful term.” In any case, I’m game for a -up chat with Altman & Co (call me!)

I’ll bring the bubbly, pop the questions, and do my best to keep the eye rolls at bay

Also: In just a few weeks, I will be headed to Park City, Utah, to participate in our annual Brainstorm conference at the Montage Deer Valley! Space is limited, so if you’re interested in joining me, register here

I highly recommend: There’s a fantastic lineup of speakers, including Ashley Kramer, chief revenue officer of OpenAI; John Furner, president and CEO of Walmart U.S.; Tony Xu, founder and CEO of DoorDash; and many, many more! With that, here’s more AI news

Sharon Goldmansharon.goldman@fortune.com@sharongoldmanFORTUNE ON AIWall Street isn’t worried an AI bubble

Sam Altman is – by Beatrice Nolan MIT report: 95% of generative AI pilots at companies are failing – by Sheryl Estrada Silicon Valley talent keeps getting recycled, so this CEO uses a ‘moneyball’ apach for uncovering hidden AI geniuses in the new era – by Sydney Lake Waymo experimenting with generative AI, but exec says LiDAR and radar sensors important to self-driving safety ‘under all conditions’ – by Jessica MatthewsAI IN THE NEWSMore shakeups for Meta AI

The New York Times reported today that Meta is expected to announce that it will split its A.I. division — which is known as Meta Superintelligence Labs — into four groups

One will focus on AI re; one on “superintelligence”; another on ducts; and one on infrastructure such as data centers

According to the article's anonymous sources, the reorganization "is ly to be the final one for some time," with moves "aimed at better organizing Meta so it can get to its goal of superintelligence and develop AI ducts more quickly to compete with others." The news comes less than two months after CEO Mark Zuckerberg overhauled Meta's entire AI organization, including bringing on Scale AI CEO Alexandr Wang as chief AI officer

Madison Avenue is starting to love AI

According to the New York Times, artificial intelligence has quietly become a fixture of advertising

What felt novel when Coca-Cola released an AI-generated holiday ad last year is now main: nearly 90% of big-budget marketers are already using—or planning to use—generative AI in ads

From hyper-realistic backdrops to synthetic voice-overs, the nology is slashing costs and duction times, opening TV spots to smaller es for the first time

Companies Shuttlerock and ITV are helping brands replace weeks of work with hours, while giants Meta and TikTok push their own AI ad tools

The shift raises ethical questions displacing creatives and fooling viewers, but industry leaders say the genie is out of the bottle: AI isn’t just lining ad duction—it’s reshaping the entire commercial playbook

Silicon Valley’s AI deals are creating zombie startups: ‘You hollowed out the organization.’ According to CNBC, Silicon Valley’s AI startup scene is being hollowed out as Big sidesteps antitrust rules with a new playbook: licensing deals and talent raids that gut mising young companies

Windsurf, once in talks to be acquired by OpenAI, collapsed into turmoil after its founders bolted to Google in a $2.4 billion licensing pact; interim CEO Jeff Wang described tearful all-hands meetings as employees realized they’d been left with “nothing.” Similar moves have seen Meta sink $14.3 billion into Scale AI, Microsoft scoop up Inflection’s founders, and Amazon strip talent from Adept and Covariant—leaving behind so-called “zombie companies” with little future

While founders and top reers cash out, investors and rank-and-file staff are often left stranded, sparking growing concern that these quasi-acquisitions not only skirt regulators but also threaten to choke off AI innovation at its source

Nvidia working on new AI chip for China that outperforms the H20, sources say

According to Reuters, Nvidia is a new China-specific AI chip, codenamed B30A, based on its cutting-edge Blackwell architecture

The chip, which could be dered to Chinese clients for testing as soon as next month, would be more powerful than the current H20 but still fall below U.S. export thresholds—using a single-die design with half the raw computing power of Nvidia’s flagship B300

The move comes after President Trump signaled possible apval for scaled-down chip sales to China, though regulatory apval is uncertain amid bipartisan concerns in Washington over giving Beijing access to advanced AI hardware

Nvidia argues that retaining Chinese buyers is crucial to prevent defections to domestic rivals Huawei, even as Chinese regulators cast suspicion on the company’s ducts.EYE ON AI REStudy finds AI-led interviews imved outcomes

A new study looked at what happens when job interviews are run by AI voice agents instead of human recruiters

In a large experiment with 70,000 applicants, people were randomly assigned to be interviewed by a person, by an AI, or given the choice

Surprisingly, AI-led interviews actually imved outcomes: applicants interviewed by AI were 12% more ly to get job offers, 18% more ly to start jobs, and 17% more ly to still be employed after 30 days

Most applicants didn’t mind the change—78% even chose the AI when given the option, especially those with lower test scores

The AI also pulled out more useful information from candidates, leading recruiters to rate those interviews higher

Overall, the study shows that AI interviewers can perform just as well as, or even better than, human recruiters—without hurting applicant satisfaction

AI CALENDARSept. 8-10: Fortune Brainstorm , Park City, Utah

Oct. 6-10: World AI Week, AmsterdamOct. 21-22: TedAI San Francisco

Dec. 2-7: NeurIPS, San Diego Dec. 8-9: Fortune Brainstorm AI San Francisco

BRAIN FOODDo AI chatbots need to be tected from harm? AI lab Anthropic has introduced a new safety measure in its Claude models, which empowers the AI to terminate conversations in extreme cases of harmful or abusive interaction

The feature activates only after repeated redirections fail—typically for content requests involving sexual exploitation of minors or facilitation of large-scale violence

The company is notably framing this as a safeguard not principally for users, but for the model’s own “AI welfare,” reflecting an exploratory stance on the machine’s potential moral .Unsurprisingly, the idea of granting AI moral is contentious

Jonathan Birch, a philosophy fessor at the London School of Economics, told The Guardian he welcomed Anthropic’s move for sparking a public debate AI sentience—a topic he said many in the industry would rather suppress

At the same time, he warned that the decision risks misleading users into believing the chatbot is more real than it is

Others argue that focusing on AI welfare distracts from urgent human concerns

For example, while Claude is designed to end only the most extreme abusive conversations, it will not intervene in cases of imminent self-harm—even though a New York Times opinion piece yesterday urged such safeguards, written by a mother who discovered her daughter’s ChatGPT conversations only after her daughter’s suicide

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