Will the AI bubble burst or is GenAI here to stay? The artificial intelligence industry is experiencing unprecedented financial euphoria. Yet, the current situation is very confusing. AI investments are reaching dizzying heights. Let’s mention OpenAI’s $40 billion funding round at $300 billion valuation and Mistral AI’s €1.7 billion funding round. Yet, some commentators are very critical of the situation. For instance, Ed Zitron predicts that the AI bubble will burst in Q4 2025. All this is fueling intense, rather than rational, debate. I wanted to confront these concerns with the expertise of Bernhard Schaffrik, Principal Analyst at Forrester Research. His analysis is insightful and nuanced. In his mind, there will be some sort of correction, but at the same time, GenAI is too popular to disappear.



When Will the AI Bubble Burst?



Is the AI bubble about to burst or is GenAI here to stay? Forrester’s Schaffrik predicts corrections but says GenAI is too popular to go — photo by Forrester.com



Forrester’s Bernhard Schaffrik is recognized as one of the most insightful experts in artificial intelligence. He provides a nuanced analysis that transcends simple financial considerations. His perspective on the AI bubble burst scenario offers first-hand insights for understanding where this transformative technology is truly heading.







The AI Bubble: Financial Reality, Technological Continuity



The question of a potential AI bubble burst cannot receive a univocal answer. As Bernhard Schaffrik rightfully points out, it all depends on one’s perspective. This duality of vision probably constitutes one of the keys to understanding the current situation and the likelihood of an AI bubble burst.



Like us, Schaffrik righfully points out that the main issue with AI is societal and philosophical — image generated with Adobe Firefly



“It’s almost impossible to get a one-sentence response from an analyst. Allow me two sentences. Number one is, of course, it always depends on the role or the profile you’re asking. If we are talking about financial investors, then yes, there are strong signals of this being a bubble because there is so much money being pumped into it—more than $120 billion US dollars in capital expenditure on AI infrastructure alone, just by the Magnificent Seven tech providers. So that bubble could burst,” explains Forrester’s expert.



This assessment gains particular relevance when considering Google’s $9 billion AI data center investment in Oklahoma for advanced AI training infrastructure.



This financial perspective, however, tells only part of the story. Technological adoption follows a different logic from financial markets, as Schaffrik confirmed during our exchange about the AI bubble burst potential.



“But now, if you put yourself in the shoes of enterprise decision makers, tech decision makers, also AI users, there are many who would say, ‘I don’t care if that bubble bursts, the technology is there, and it won’t go away.’



“Regardless of the amounts all the financial transactions surrounding the AI industry, people are actually using this technology. And they like what they are seeing.