Why Bret Taylor Thinks the AI Bubble Is “Okay”
When asked about the parallels between today’s AI wave and the internet boom, Taylor explained that both excitement and risk can coexist.
“I think it is both true that AI will transform the economy, and I think it will, like the internet, create huge amounts of economic value in the future,” Taylor said. “I think we’re also in a bubble, and a lot of people will lose a lot of money.”
His comments echo what many industry veterans have been hinting at: explosive innovation often comes with speculative overinvestment.
Lessons From the Dot-Com Era
Taylor compared the AI bubble to the late ‘90s dot-com boom. Back then, companies were raising massive funding rounds with little more than an idea. Many failed when the bubble burst, but the survivors — Amazon, Google, eBay — went on to reshape the economy.
He suggests AI is following a similar trajectory. Startups may rise and fall quickly, but the foundational technology will outlast the hype and fuel the next era of digital transformation.
The Long-Term View
Despite warning of short-term losses, Taylor remains optimistic. His dual role as OpenAI board chair and CEO of AI agent startup Sierra gives him a front-row seat to both corporate and startup ecosystems.
Taylor emphasized that transformative technologies almost always pass through a hype cycle before stabilizing. The bursting of the bubble may wash away unsustainable players, but it will also clear the path for the companies that truly harness AI’s potential.
What It Means for Businesses and Investors
Taylor’s remarks send a clear message: yes, caution is warranted, but fear shouldn’t outweigh vision. Investors should prepare for volatility, while businesses should focus on real-world applications of AI rather than chasing hype.
The AI bubble may pop, but it will likely leave behind the next wave of trillion-dollar companies.
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