Analysts downplay AI bubble worries as Altman says some investors will be left ‘very burnt’
The artificial intelligence boom that Sam Altman helped ignite with ChatGPT in late 2022 is starting to make even him uneasy.
Startups with little more than a pitch deck are raising hundreds of millions. Valuations have become “insane.” Capital is chasing a “kernel of truth” with feverish speed.
The OpenAI CEO still believes the long-term societal upside of AI will outweigh the froth, and he’s ready to keep spending in pursuit of that goal.
“Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes,” he said at a recent dinner with reporters. “Is AI the most important thing to happen in a very long time? My opinion is also yes.”
He repeated the word ‘bubble‘ three times in 15 seconds, then half-joked, “I’m sure someone’s gonna write some sensational headline about that. I wish you wouldn’t, but that’s fine.”
While Altman warned that valuations are now out of control, he’s ready to shell out on more infrastructure.
“You should expect OpenAI to spend trillions of dollars on datacenter construction in the not very distant future,” Altman said. “And you should expect a bunch of economists wringing their hands, saying, ‘This is so crazy, it’s so reckless,’ and we’ll just be like, ‘You know what? Let us do our thing.'”
OpenAI is already looking beyond Microsoft Azure’s cloud capacity, and is shopping around for more.
The company signed a deal with Google Cloud this spring and, according to Altman, OpenAI is “beyond the compute demand” of what any one hyperscaler can offer.
“You should expect us to take as much compute as we can,” he added. “Our bet is, our demand is going to keep growing, our training needs are going to keep going, and we will spend maybe more aggressively than any company who’s ever spent on anything ahead of progress, because we just have this very deep belief in what we’re seeing.”
It’s not just OpenAI. All the megacaps are trying to keep up.
In their most recent earnings, tech’s biggest names all raised capital expenditure guidance to keep pace with AI demand: Microsoft is now targeting $120 billion in full-year capital expenditures, Amazon is topping $100 billion, Alphabet raised its forecast to $85 billion, and Meta lifted the high end of its capex range to $72 billion.
Wedbush’s Dan Ives said Monday on CNBC’s “Closing Bell” that demand for AI infrastructure has grown 30% to 40% in the last months, calling the capex surge a validation moment for the sector.
Ives acknowledged “some froth” in parts of the market, but said the AI revolution with autonomous is only starting to play out and we are in the “second inning of a nine-inning game.”
“The actual impact over the medium and long term is actually being underestimated,” he said.
Citi’s Rob Rowe, speaking Monday on CNBC’s “Money Movers,” pushed back on comparisons between today’s AI boom and the dotcom bubble.
“Back then, you had a lot of over-leveraged situations. You didn’t have a lot of companies that had earnings,” Rowe said. “Here you’re talking about companies that have very solid earnings, very strong cash flow, and they’re funding a lot of this growth through that cash flow. So in many respects, it’s a little different than that.”
He added that the current wave of AI investment is being driven by structural shifts in the global economy, particularly the rapid growth of digital services, which now account for a large share of global exports. Also unlike the dotcom cycle of the late 90s, companies today are funding their infrastructure spending with strong cash flow rather than relying on debt.
Still, concerns about overheating have been mounting.
Alibaba co-founder Joe Tsai pointed to worrying signs in the AI sector well before the hyperscalers raised their annual capex guidance during the latest earnings prints.
In March, he warned of a brewing AI bubble in the U.S.
Speaking at HSBC’s Global Investment Summit in Hong Kong, Tsai said he was astounded by the scale of datacenter spending under discussion. Tsai questioned whether hundreds of billions in spending is necessary, and flagged concern about companies starting to build datacenters “on spec,” without clear demand.
Altman, for his part, sees these cycles as part of the natural rhythm of technological progress.
The dotcom crash wiped out scores of companies, but still gave rise to the modern internet. He expects AI to follow a similar path: a few high-profile wipeouts, followed by a lasting transformation.
“I do think some investors are likely to get very burnt here, and that sucks. And I don’t want to minimize that,” he said. “But on the whole, it is my belief that… the value created by AI for society will be tremendous.”
WATCH: OpenAI staffer reportedly to sell $6 billion in stock to SoftBank and other investors
Electricity demand is surging in Texas, and solar, wind, and battery storage are meeting it.
According to new data from the US Energy Information Administration (EIA), electricity demand across the Texas grid managed by the Electric Reliability Council of Texas (ERCOT) hit record highs in the first nine months of 2025. ERCOT, which supplies power to about 90% of the state, saw demand jump 5% year-over-year to 372 terawatt hours (TWh) – a 23% increase since 2021. No other major US grid has grown faster over the past year.
Solar and wind keep ERCOT’s grid steady
The biggest growth story in Texas power generation is solar. Utility-scale solar plants produced 45 TWh from January through September, up 50% from 2024 and nearly four times what they generated in 2021 (11 TWh). Wind power also continued to climb, producing 87 TWh through September – a 4% increase from last year and 36% more than in 2021.
Together, wind and solar supplied 36% of ERCOT’s total electricity over those nine months. Solar, in particular, has transformed Texas’s daytime energy mix. From June to September, ERCOT solar farms generated an average of 24 gigawatts (GW) between noon and 1 pm – double the midday output from 2023. That growth has pushed down natural gas use at midday from 50% of the mix in 2023 to 37% this year.
Battery storage is filling in the gaps
Batteries charge during the day when wind and solar generation are the highest, and they produce electricity when generation from wind and solar slows down. ERCOT began reporting battery output separately in October 2024 in its hourly grid data, and it’s clear that batteries are now helping to smooth out evening peaks. This past summer, batteries supplied an average of 4 GW of power around 8 pm, right as solar production dropped off.
Natural gas is flatlining
Natural gas is still Texas’s dominant power source, but it isn’t growing like it used to. Between January and September, gas-fired plants generated 158 TWh of electricity, compared to 161 TWh in 2023. Gas comprised 43% of ERCOT’s generation mix during the first nine months of 2025, down from 47% in the first nine months of 2023 and 2024.
More demand growth ahead
The EIA expects Texas electricity demand to keep rising faster than any other grid in the US. In its latest Short-Term Energy Outlook, the EIA projects ERCOT’s demand will climb another 14% in the first nine months of 2026, reaching 425 TWh. That means Texas will need even more solar, wind, and battery storage to keep up with its breakneck growth.
Read more: This $900 million solar farm in Texas is going 100% to data centers
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GM is recalling nearly 23,000 Chevy Equinox EV and Cadillac Optiq models due to a defect where the tire tread could fall off.
GM is recalling more Chevy Equinox EV models
In a letter sent to the National Highway Traffic Safety Administration (NHTSA), GM said it has decided to issue a safety recall for certain Chevy Equinox EV and Cadillac Optiq models from model years 2025 to 2026.
This time, it isn’t necessarily GM’s fault. The vehicles may be equipped with 21″ all-season tires that Continental Tire is recalling.
According to Continental, the tires were produced during the week of October 6, 2024, and may have a defect where the tire tread could partially or fully detach. The records show the defect is due to a nonconforming tread base rubber compound.
Owners of affected vehicles may notice unusual tread wear or bulging, vibration while driving, or tire noises. GM is unaware of any incidents related to the defect, but is issuing the recall out of an abundance of caution.
On September 18, 2025, GM inspected the assembly plant and confirmed there were no suspect tires in stock. The 21″ tires come standard on RS trims and are optional on LT1 and LT2 grades.
Although GM is recalling 22,914 Chevy Equinox EVs and Cadillac Optiqs, it estimates that only about 1% of them have the defect.
The recall includes:
- 2026 Cadillac Optiq: 214
- 2026 Chevy Equinox EV: 1,832
- 2025 Cadillac Optiq: 3,468
- 2025 Chevy Equinox EV: 17,400
GM dealers will check all four tires and replace them if needed, free of charge. Dealers were notified on October 16. Owner notification letters are expected to be mailed out on December 1, 2025.
You can contact Chevrolet’s customer service number at 1-800-222-1020 or Cadillac’s at 1-800-333-4223. GM’s recall number is N252525030. Owners can also call the NHTSA hotline at 1-888-327-4236 or visit the nhtsa.gov website for more information.
The Chevy Equinox EV is now the third best-selling EV in the US, trailing only the Tesla Model Y and Model 3. Meanwhile, Cadillac’s entry-level Optiq SUV is the fifth-most-popular luxury EV. The recall is minor and only affects a small percentage of models, so it’s not expected to have a major impact.
If you want to test one of them for yourself, we can help you get started. Check out our links below to find available Chevy Equinox EV and Cadillac Optiq models near you.
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In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss Tesla’s earnings madness, Rivian layoffs, Ford pausing F-150 Lightning, and more.
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After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:
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