Stop worrying about the bubble in AI—it’s sustainable, three Wall Street analysts from Goldman Sachs, JPMorgan, and Wedbush argued this morning in notes seen by Fortune.
Traders seem to agree—at least for now. Futures contracts for the tech-heavy Nasdaq 100 were up 55% this morning prior to the opening bell, after the index closed up 0.68% yesterday. The index is up 18% this year, despite worries that the AI boom bears a resemblance to the dot-com bubble of 2000.
Hemant Taneja, CEO of VC firm General Catalyst, was quoted in the Financial Times this morning saying, “Of course there’s a bubble … Bubbles are good. Bubbles align capital and talent in a new trend, and that creates some carnage but it also creates enduring, new businesses that change the world.”
The FT’s report hinges on the fact that VC firms have ploughed $161 billion into AI startups this year, and 10 of them—OpenAI and Anthropic among them—now have a collective valuation of $1 trillion. But none of them are profitable, the FT says.
We should all stop worrying and learn to love the AI boom, if new research from Goldman Sachs is correct. In a note titled “The AI Spending Boom Is Not Too Big,” Joseph Briggs and his colleagues say “anticipated investment levels are sustainable, although the ultimate AI winners remain less clear.”
The Goldman team argues that when deployed properly, the productivity gains from AI will far exceed the investment currently going into it.
“We are not concerned about the total amount of AI investment. AI investment as a share of US GDP is smaller today (
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