Review: "Are We in an AI Bubble?" by INSEAD Knowledge

Everyone seems to have an opinion on AI valuations right now. Most are either panicking or cheerleading. This piece from four INSEAD finance professors is neither, and that alone makes it worth reading.

What stands out immediately is that this is not one voice with one verdict. Four faculty members each bring their own lens to the same question, and they do not always agree. That format keeps you engaged because you are not just reading a conclusion, you are watching smart people reason through uncertainty in real time.

The most memorable argument comes from the comparison between the dotcom era and today. The critical difference being that the biggest AI winners are actually making money, not just burning it. Nvidia reporting US$57 billion in revenue with 62 percent year-over-year growth is not dotcom fantasy territory. The authors make clear that P/E ratios today, while elevated, are nowhere near the irrational peaks of 1999 and 2000.

What stays with you is the circular financing concern. The arrangement where Nvidia invests in OpenAI, OpenAI buys Nvidia chips and the cycle feeds itself is described as potentially a "house of cards" if real end-user demand never materialises. The article does not call it fraud but it does call it uncomfortable, and that nuance feels honest.

The observation on Meta versus Microsoft is the sharpest practical insight. Both beat earnings. One stock jumped, one fell. The difference? One could show AI improving actual profitability. The other could not. That single example explains the entire investor mood right now better than any chart would.

If there is a gap, it is that the piece understandably stops at analysis and stops short of a clear directional call. But perhaps that is the right call given how genuinely uncertain the picture is.

Verdict: A mature, multi-perspective read that resists the temptation to sensationalise. If you want thoughtful analysis over hot takes on the AI investment question, this is exactly where to start.

Original Article: https://knowledge.insead.edu/economics-finance/are-we-ai-bubble

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Credit & Disclaimer: This review is based on my personal understanding of "Are We in an AI Bubble?" originally published at INSEAD Knowledge (knowledge.insead.edu). This review is shared for knowledge sharing and educational purposes only. No ownership of the original content is claimed. Readers are encouraged to visit the original article for the full perspective.