Bill Gates Says the AI Boom is Turning Into a Bubble, Like the Dot-Com Days

Artificial intelligence is indeed booming, and it has been staple for many of us in our daily lives. However, Microsoft’s co-founder and philanthropist, Bill Gates, believes the excitement around the technology may have gone too far (via Business Insider). Speaking on CNBC’s “Squawk Box,” Bill Gates said that the world is in an AI bubble, one that reminds him of the late 1990s dot-com boom.

According to Gates, the current the hype around AI mirrors the era when internet startups were overvalued before the 2000 crash. “Some companies succeeded, but a lot were kind of me-too, burning capital,” he said. Gates added that while AI’s potential is real, the frenzy has attracted massive spending that won’t always pay off. He subtly warned:

In the end, something very profound happened. The world was very different. Some companies succeeded, but a lot of the companies were kind of me-too, fell behind, burning capital companies.

Interestingly, this skepticism lines up with a story Microsoft CEO Satya Nadella shared recently. On The TBPN Show, Nadella revealed that Gates was wary when Microsoft first invested $1 billion in OpenAI back in 2019. “Bill even said, ‘You’re going to burn this billion dollars,’” Nadella recalled. That same stake, now valued around $135 billion, turned out to be one of Microsoft’s successful bets in the AI industry.

Still, the boom is straining balance sheets of the Remond giant. While Microsoft’s FY26 Q1 revenue bumped 18% in the same period as last year (to $77.7 billion),” the latest filing showed $11.5 billion loss tied to OpenAI.

Having all that said, Gates doesn’t deny AI’s power, but his comparison to the dot-com era feels like a reality check. Much like the 1990s internet wave, the winners will emerge stronger, after the bubble bursts.