A.I. is a $1 trillion investment opportunity but will be ‘biggest bubble of all time,’ CEO predicts
Emad Mostaque, founder and CEO of Stability AI, speaks during the Bloomberg Technology Summit in San Francisco, California, US, on Thursday, June 22, 2023.
David Paul Morris | Bloomberg | Getty Images
Artificial intelligence will be the biggest bubble of all time, according to the CEO of open-source AI company Stability AI.
Speaking with UBS analysts on a call last week, Stability AI CEO Emad Mostaque said of artificial intelligence: “I think this will be the biggest bubble of all time.” He added that it is still at the very early stages and not ready for mass-scale adoption in industries like banking just yet.
“I call it the ‘dot AI’ bubble, and it hasn’t even started yet,” he said.
Stability AI is the company behind Stable Diffusion, one of the other more popular generative AI tools aside from OpenAI.
Stable Diffusion allows users to generate photo-realistic images by inputting text. It has more than a million users and has raised over $100 million from investors including Coatue and Lightspeed Venture Partners.
Mostaque, its co-founder and CEO, has been accused of making misleading claims about his background, achievements, and partnerships. He disputed the claims one by one in a detailed response on his personal blog.
Generative AI has captivated the imagination of many an academic, boardroom executive, and even school student, for its ability to produce humanlike language and visual content from scratch in response to user prompts by using vast amounts of data.
AI has long been around, with the technology now a common feature of online browsing, social media platforms, and home assistants. Beyond consumer applications, the technology is being used in medicine, transportation, robotics, science, education, finance, defense, and other industries.
However, a more novel form of AI which has come about recently is generative AI, which is used in tools such as the popular AI chatbot ChatGPT, from U.S. tech firm OpenAI, as well as Google Bard and Microsoft Bing Chat, and image generators like Dall-E, Stable Diffusion, and Midjourney.
Mostaque said that the total amount of investment needed in AI was likely to be $1 trillion “because it’s more important than 5G as infrastructure for knowledge,” and suggested banks like UBS would have to adopt the technology as it is a “massive market.”
But, he added, it is at the “early stages” of development right now.
“It’s not quite ready” to be deployed at scale within large industries like financial services, “but we can see the value,” Mostaque said.
Mostaque said that companies that do not use AI appropriately in their businesses will be “punished” by the stock market.
He cited the example of Google, which lost $100 billion in a single day after its Bard AI chatbot gave inaccurate information in a promotional video upon its release. Google is competing aggressively with Microsoft to win in the race to build superior AI tools.
“I think this is real. I think that there aren’t many investable opportunities here, and you’ll see people moving from the best chip manufacturers to companies that are using this to impact their bottom line and their top line appropriately. And you will see the market punishing those that don’t use this,” Mostaque said.
“This will be one of the biggest investment themes over the next few years,” he added.
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Mustafa Suleyman, CEO of Microsoft AI, speaks at an event commemorating the 50th anniversary of the company at Microsoft headquarters in Redmond, Washington, on April 4, 2025.
David Ryder | Bloomberg | Getty Images
Microsoft AI chief Mustafa Suleyman says only biological beings are capable of consciousness, and that developers and researchers should stop pursuing projects that suggest otherwise.
“I don’t think that is work that people should be doing,” Suleyman told CNBC in an interview this week at the AfroTech Conference in Houston, where he was among the keynote speakers. “If you ask the wrong question, you end up with the wrong answer. I think it’s totally the wrong question.”
Suleyman, Microsoft’s top executive working on artificial intelligence, has been one of the leading voices in the rapidly emerging field to speak out against the prospect of seemingly conscious AI, or AI services that can convince humans they’re capable of suffering.
In 2023, he co-authored the book “The Coming Wave,” which delves into the risks of AI and other emerging technologies. And in August, Suleyman penned an essay titled, “We must build AI for people; not to be a person.”
It’s a controversial topic, as the AI companion market is swiftly growing, with products from companies including Meta and Elon Musk’s xAI. And it’s a complicated issue as the generative AI market, led by Sam Altman and OpenAI, pushes towards artificial general intelligence (AGI), or AI that can perform intellectual tasks on par with the capabilities of humans.
Altman told CNBC’s “Squawk Box” in August that AGI is “not a super useful term” and that what’s really happening is models are advancing quickly and that we’ll rely on them “for more and more things.”
For Suleyman, it’s particularly important to draw a clear contrast between AI getting smarter and more capable versus its ability to ever have human emotions.
“Our physical experience of pain is something that makes us very sad and feel terrible, but the AI doesn’t feel sad when it experiences ‘pain,'” Suleyman said. “It’s a very, very important distinction. It’s really just creating the perception, the seeming narrative of experience and of itself and of consciousness, but that is not what it’s actually experiencing. Technically you know that because we can see what the model is doing.”
Within the AI field, there’s a theory called biological naturalism, proposed by philosopher John Searle, that says consciousness depends on processes of a living brain.
“The reason we give people rights today is because we don’t want to harm them, because they suffer. They have a pain network, and they have preferences which involve avoiding pain,” Suleyman said. “These models don’t have that. It’s just a simulation.”
Suleyman and others have said that the science of detecting consciousness is still in its infancy. He stopped short of saying that others should be prevented from researching the matter, acknowledging that “different organizations have different missions.”
But Suleyman emphasized how strongly he opposes the idea.
“They’re not conscious,” he said. “So it would be absurd to pursue research that investigates that question, because they’re not and they can’t be.”
‘Places that we won’t go’
Suleyman is on a speaking tour, in part to inform the public of the risks of pursuing AI consciousness.
Prior to the AfroTech Conference, he spoke last week at the Paley International Council Summit in Silicon Valley. There, Suleyman said that Microsoft will not build chatbots for erotica, a stance that’s in conflict with others in the tech industry. Altman announced in October that ChatGPT will allow adult users to engage in erotic conversations, while xAI offers a risque anime companion.
“You can basically buy those services from other companies, so we’re making decisions about what places that we won’t go,” Suleyman reiterated at AfroTech.
Suleyman joined Microsoft in 2024 after the company paid his startup, Inflection AI, $650 million in a licensing and acquihire deal. He previously co-founded DeepMind and sold it to Google for $400 million over a decade ago.
During his Q&A session at AfroTech, Suleyman said he decided to join Microsoft last year in part because of the company’s history, stability and vast technological reach. He was also pursued by CEO Satya Nadella.
“The other thing to say is that Microsoft needed to be self-sufficient in AI,” he said onstage. “Satya, our CEO, set about on this mission about 18 months ago, to make sure that in house we have the capacity to train our own models end to end with all of our own data, pre training, post training, reasoning, deployment in products. And that was part of bringing on my team.”
Since 2019, Microsoft has been a major investor and cloud partner to OpenAI, and the companies have used their respective strengths to build big AI businesses. But the relationship has shown signs of tension of late, with OpenAI partnering with Microsoft rivals like Google and Oracle, and Microsoft focusing more on its own AI services.
Suleyman’s concerns about consciousness have gained resonance. In October, California Gov. Gavin Newsom signed SB 243, which requires that chatbots disclose they are AI and tell minors every three hours to “take a break.”
Last week, Microsoft announced new features for its Copilot AI service, including an AI companion called Mico and the ability to engage with Copilot in group chats with others. Suleyman said Microsoft is building services that are aware that they’re AI.
“Quite simply, we’re creating AIs that are always working in service of the human,” he said.
There’s plenty of room for personality, he added.
“The knowledge is there, and the models are very, very responsive,” Suleyman said. “It’s on everybody to try and sculpt AI personalities with values that they want to see, they want to use and interact with.”
Suleyman highlighted a feature Microsoft launched last week called real talk, which is a conversation style of Copilot designed to challenge users’ perspectives instead of being sycophantic.
Suleyman described real talk as sassy and said it had recently roasted him, calling him “the ultimate bundle of contradictions” for warning of the dangers of AI in his book while also accelerating its development at Microsoft.
“That was just a magical use case because in some ways I was like, I actually do feel kind of seen by this,” Suleyman said, noting that AI itself full of contradictions.
“It is both underwhelming in some ways and, at the same time, it’s totally magical,” he said. “And if you’re not afraid by it, you don’t really understand it. You should be afraid by it. The fear is healthy. Skepticism is necessary. We don’t need unbridled accelerationism.”
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Technology
Microsoft plans to hire more but with ‘a lot more leverage’ thanks to AI, CEO Satya Nadella says
Microsoft CEO Satya Nadella speaks during an event commemorating the 50th anniversary of the company at Microsoft headquarters in Redmond, Washington, on April 4, 2025. Microsoft Corp., determined to hold its ground in artificial intelligence, will soon let consumers tailor the Copilot digital assistant to their own needs.
David Ryder | Bloomberg | Getty Images
Microsoft will expand its employee base once again, CEO Satya Nadella told investor Brad Gerstner on a podcast that aired on Friday.
The software maker’s workforce didn’t budge in the 2025 fiscal year, which ended in June. It stood at 228,000, with multiple rounds of layoffs lowering the total number by at least 6,000. In July, Microsoft let go of another 9,000 workers.
“I will say we will grow our headcount, but the way I look at it is, that headcount we grow will grow with a lot more leverage than the headcount we had pre-AI,” Nadella said on the BG2 podcast. OpenAI, which has a broad partnership with Microsoft, introduced its ChatGPT assistant in 2022. Microsoft’s headcount grew by 22% in the 2022 fiscal year.
Employees will figure out how to do their jobs differently, Nadella said, adding that the company wants to ensure they can access artificial intelligence features in Microsoft 365 productivity software and the GitHub Copilot AI coding assistant. Those services draw on AI models from Anthropic and OpenAI.
“It’s the unlearning and learning process that I think will take the next year or so, then the headcount growth will come with max leverage,” he said.
A similar adjustment played out at corporations decades ago, Nadella said. To prepare forecasts, inter-office memos would circulate across multiple sites by fax, and then came email and Excel spreadsheets, he said.
“Right now, any planning, any execution, starts with AI. You research with AI, you think with AI, you share with your colleagues and what have you,” Nadella said.
This week, Amazon, which is racing against Microsoft to rent out cloud infrastructure for running AI models, cut 14,000 corporate employees.
Amazon’s senior vice president of people experience and technology, Beth Galetti, told workers in a memo that “this generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones).”
On the podcast, Nadella talked about a Microsoft executive who deals with networking fiber. As the company ramped up data center operations to meet rising cloud demand, the executive realized she wouldn’t be able to hire all the people she thought she needed, and so she built AI agents to handle maintenance, Nadella said.
“That is an example of you, to your point, a team with AI tools being able to get more productivity,” Nadella told Gerstner, who is founder and CEO of technology investment firm Altimeter Capital.
On Wednesday, Microsoft reported 12% year-over-year revenue growth and showed the widest operating margin since 2002.
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