Chatter of an AI bubble has reached a fever pitch.

A number of investors are concerned that the AI market might be overheating and that we’re at risk of reliving the dot-com bubble burst in 2000. Some are wondering whether large language models are actually powerful enough to develop the long-desired superintelligence; some fear tech companies’ massive expenditures won’t pay off; and some are worried that less experienced investors are getting caught up in the hype.

According to data from CB Insights, 50% of venture dollars were spent on AI startups during the first half of 2025. In those six months, AI funding exceeded spending for all of last year.

Major tech stocks fell last week, in part out of alarm over a possible AI bubble. Eyes are on Nvidia earnings on Wednesday, as investors look for a glimmer of good news.

Here’s a guide to the key events that sparked the recent AI bubble anxiety.

Sam Altman’s warning

OpenAI CEO Sam Altman warned that people might be getting “overexcited” about AI earlier this month.

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

Altman said it’s “insane” and “not rational” that some tiny AI startups are getting funding at high valuations.

“Someone is going to lose a phenomenal amount of money,” he said, according to The Verge. “We don’t know who, and a lot of people are going to make a phenomenal amount of money.”

Other tech leaders weighed in after Altman’s comments. Former Google CEO Eric Schmidt said it’s “unlikely” that this is a bubble, while Alibaba cofounder Joe Tsai said he was “beginning to see some kind of bubble” and worries that the push to build data centers might outpace demand.

OpenAI released ChatGPT-5 earlier this month, and though Altman called the update a “major upgrade,” it got a lukewarm response — leading some to wonder if AI model gains were slowing. Some complained that the new bot was cold and impersonal, and Altman promised to bring ChatGPT-4o back for premium users.

MIT’s eye-opening report

A recent report from MIT found that 95% of AI pilots don’t generate measurable financial savings or boost company profits. The report’s authors interviewed 150 executives, surveyed 350 employees, and examined 300 AI projects. The implications are big since the report found there’s been between $30 and $40 billion in enterprise investment into generative AI.

More than a failure of the AI itself, the report identified a “learning gap” that’s stifling potential savings — employees and companies don’t understand how to best use the technology and capitalize on the benefits. Many companies are using AI in marketing and sales, when it could save more by helping out with back-end processes, the report found.

Meta’s AI restructuring

After spending millions to build a “superintelligence” AI team, Meta is breaking up its internal AI apparatus. The four new teams will focus on research, training, products, and infrastructure.

Meta is considering downsizing within the AI division, The New York Times reported, and some AI executives might leave. Trimming the head count of such a high-priority group would mark a significant change for Meta CEO Mark Zuckerberg, who has made waves in recent months by offering mind-boggling salaries and $100 million signing bonuses to top AI talent.

Now, Meta is pumping the recruitment brakes. The company has implemented a hiring freeze in its AI division, as The Wall Street Journal first reported. A spokesperson told Business Insider that it was part of “basic organizational planning.”

The move spooked some investors, calling into question the future of tech giants’ AI investments. Meta’s stock is up more than 25% since the beginning of the year.