The Big Story 

Amazon founder Jeff Bezos suggested Friday there is a bubble in the artificial intellgence market but argued this ultimately could benefit society. 

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During an appearance at Italian Tech Week, the billionaire sought to distinguish what he described as an “industrial bubble.”

“This is a kind of industrial bubble, as opposed to financial bubbles,” Bezos said in a conversation with Ferrari Chair John Elkann in Turin, Italy. 

“The ones that are industrial are not nearly as bad,” he continued. “It could even be good because when the dust settles and you see who are the winners, society benefits from those inventions.”

He pointed to a bubble that formed in the biotechnology industry in the 1990s, noting investors “all lost money” when it burst, but society ultimately received several lifesaving drugs as a result. 

“That’s what’s going to happen here too,” Bezos said. “This is real. The benefits to society from AI are going to be gigantic.” 

Stock market bubbles form when share prices rapidly increase in a way that is disconnected from their underlying value.

Many have raised concerns that the AI boom is fueling a bubble, as tech companies see massive growth even though AI investments have yet to show real returns. 

“[The] thing that happens when people get very excited, as they are today about artificial intelligence for example, is every experiment gets funded, every company gets funded,” Bezos noted. 

“Investors have a hard time in the middle of this excitement distinguishing between the good ideas and the bad ideas. And so, that’s probably also happening today,” he added.

OpenAI CEO Sam Altman has similarly suggested the AI market is in a bubble, drawing comparisons with the dot-com bubble that burst in 2000.

“When bubbles happen, smart people get overexcited about a kernel of truth,” Altman reportedly said in August. “If you look at most of the bubbles in history, like the tech bubble, there was a real thing. Tech was really important. The internet was a really big deal. People got overexcited.”

“Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes,” he added at the time. “Is AI the most important thing to happen in a very long time? My opinion is also yes.” 

Welcome to The Hill’s Technology newsletter, I’m Julia Shapero — tracking the latest moves from Capitol Hill to Silicon Valley.

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