Torsten Slok from the investment company Apollo Global Management warned about the risks of «pumping» money into artificial intelligence.
The chief economist of the American asset management company warned that AI companies are more overvalued than dot-coms of the early 2000s, whose collapse provoked a general economic crisis. He singled out the 10 most successful companies and suggested that the only real difference between the AI business today and dotcoms is that AI is even more overvalued.
The dot-com bust at the turn of the century was caused by the increased adoption and use of the Internet by companies. At the time, it was a relatively new technology, but venture capitalists considered it potentially super-profitable. Over the last five years of the 20th century, they invested trillions of dollars in the Internet, and the value of publicly traded companies’ shares soared — but then collapsed even faster.
In the early 2000s, many of the companies that participated in the boom went bankrupt. Even industry giants like Amazon lost a huge portion of their investments and capitalization. This is exactly what Slack believes awaits large AI companies: Microsoft, OpenAI, Meta, Google, etc. He emphasizes that these firms have in recent years experienced a significant increase in capitalization thanks to the expectations of AI.
The expert says that this completely contradicts the profitability potential of these companies. He suggests that most of the gains made by the stock market during the AI boom were due to the overvaluation of these leading stocks. This, he argues, will not last, and since the boom is bigger this time around, the bust could be even worse.
Although Slack doesn’t give a timeline for when this might happen, it’s clear even to non-specialists that now the AI industry contains an extraordinary amount of money. Also, as Tom’s Hardware points out, in addition to the dot-com crash, there have been several situations recently when the latest technologies did not justify themselves. For example, Meta invested tens of billions in the Metaverse and then quickly switched to artificial intelligence as if nothing had happened. NFTs and blockchain were supposed to change the way art, finance, and investing work, but this hasn’t happened yet.
Torsten Slok: “The difference between the IT bubble in the 1990s and the AI bubble today is that the top 10 companies in the S&P 500 today are more overvalued than they were in the 1990s” pic.twitter.com/OEervHU4WG
— zerohedge (@zerohedge) July 16, 2025
But these are rather niche things, and AI is everywhere. AI has promising prospects in many industries, but does it justify hundreds of billions of dollars in investment? Slack argues that it does not. According to him, when the world realizes this, these companies may find their ephemeral empires crumbling like sand. If the situation is similar to the dot-com bust, speculative companies around AI will probably fail, while more stable ones like Amazon or Google will probably survive, albeit with less influence.
Just as the dot-com bust didn’t kill the Internet, the AI bust won’t kill the technology. But it may become something commonplace, less fashionable and less expensive.
Sources: Gizmodo, Tom’s Hardware
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