Wall Street Split On AI’s Future—Revolution Or A Bubble?

Artificial intelligence (AI) has quickly become the centerpiece of corporate spending, investor enthusiasm and public debate. From massive data center projects to skyrocketing capital flows, AI is shaping markets at a pace few expected.

But with so much money rushing in, Wall Street is now divided: is this the start of a historic transformation — or the makings of a bubble?

UBS Warns Of Overheating As Private Credit Floods AI

Private credit lenders are pouring billions into AI, fueling a boom that UBS Global Research says could risk overheating. The asset class, once focused on smaller companies, has shifted to financing major tech players, with roughly $450 billion loaned to the sector as of early 2025, up $100 billion in a year.

Big Tech is driving the surge. Microsoft, Amazon, Alphabet and Meta plan to spend more than $344 billion this year on AI and data center projects.

UBS analysts cautioned that the rush into AI financing has also brought riskier lending practices, including a rise in “payment-in-kind” loans that let borrowers defer cash interest — now at the highest level since 2020.

Sam Altman: ‘Yes, We’re in a Bubble’

Even as investors rush to fund the AI gold rush, OpenAI CEO Sam Altman said he sees signs of an AI bubble.

“When bubbles happen, smart people get overexcited about a kernel of truth,” Altman said in an interview with The Verge last week, comparing today’s hype to the dot-com boom.

Still, he called AI “the most important thing to happen in a very long time,” suggesting the underlying technology will outlast the froth.

Dan Ives: ‘The Fourth Industrial Revolution’

On the other side, Wedbush Securities analyst Dan Ives dismissed bubble fears, predicting a sustained AI-driven bull market.

“My view is that the next two to three years will be a tech bull market,” Ives told CNBC. “We’re only in the second inning of the game.”

He called AI the “fourth industrial revolution” and pointed to corporate earnings as proof that demand is real, not speculative.

Ives sees the next wave of growth coming from software, cybersecurity and autonomous technologies, describing AI as a transformational shift that investors are still underestimating.

Bubble Or Revolution?

The debate highlights a central tension on Wall Street: Is the AI boom an unsustainable bubble built on cheap credit, or the early stages of a decades-long technological revolution?

For now, the answer may be both — a transformative technology drawing record investment, with financial risks that could test how far the boom can run.

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