Microsoft co-founder Bill Gates has cautioned that the global surge in artificial intelligence investment resembles the dot-com bubble of the late 1990s, suggesting that while AI will bring lasting technological change, many current ventures may not survive.
In an interview on CNBC’s Squawk Box on Tuesday, Gates said the world is witnessing an “AI bubble,” though not a speculative mania comparable to the tulip craze of the 17th century. “That’s not where we are,” he noted, adding that AI represents genuine progress but is currently attracting a wave of unsustainable projects.
Drawing comparisons to the internet boom that led to the 2000 crash, Gates said the parallels lie in overinvestment and inflated expectations. “In the end, something very profound happened. The world was very different,” he said. “Some companies succeeded, but a lot of the companies were kind of me-too, fell behind, burning capital companies.”
Gates’ comments come as global firms pour billions into AI infrastructure and model development. Venture capital funding for AI startups surpassed $50 billion in 2025, and major technology firms including Microsoft, Google, and Amazon have increased spending on AI data centres and cloud integration.
Gates also reflected on his own changing stance toward AI investment. Microsoft’s initial $1 billion partnership with OpenAI in 2019—reportedly opposed by Gates at the time—has grown into a 27% stake valued at about $135 billion. Microsoft has since become a leading player in generative AI through products such as Copilot and Azure AI.
Despite concerns of overvaluation, Gates described AI as “the biggest technical thing ever in my lifetime,” saying it would permanently transform healthcare, education, and communications. However, he warned that not all companies will benefit equally. “Some will commit to data centres whose electricity is too expensive,” he said, predicting a market correction as inefficiencies surface.
Analysts view Gates’ remarks as a sign that AI’s current growth phase could shift toward consolidation, similar to how the early internet era evolved after the dot-com crash.
