AI bubble expands as NVIDIA, Google, Meta and Microsoft report record numbers

In 2000, the dot-com bubble burst. As the internet took the world – and the stock market – by storm, investors raced towards tech companies. Valuations were high, as was the Nasdaq Composite index; but within two years, the market crashed, companies failed and stock prices plummeted.

Twenty-five years later, the tech industry is facing a familiar fate. Advances in artificial intelligence have fuelled rapid growth for many of the world’s largest tech companies, NVIDIA, Meta, Google and Microsoft included. NVIDIA was recently valued at a record-breaking $5 trillion – more than India’s entire GDP, by comparison. With all the headlines centred around AI, including generative and agentic, the technology has again piqued investors’ interest.

In the most recent quarterly earnings, Microsoft reported $77 billion in revenue – an 18 percent increase from one year ago – and $34.9 billion in expenditure, with much of that going towards AI infrastructure. In 2019, Microsoft entered a long-term partnership with OpenAI, the company behind ChatGPT and Sora, relying on its frontier AI models and collaborating on advancement efforts.

In the same vein, Meta and Google (owned by Alphabet) reported $51.24 billion and $102.3 billion in third-quarter revenues, respectively. Both companies have also committed to AI innovation, investing billions in R&D and data centres, while NVIDIA promised to put $100 billion into OpenAI. NVIDIA, which provides the world with graphics processing units (GPUs), reported $44 billion in first-quarter revenue.

With record numbers in both earnings and expenditure, what does it all mean for the tech industry – and the economy at large? Market analysts warn that an AI bubble burst could be headed our way, following in the footsteps of the dot-com boom as well as 2008’s global financial crisis. A recent study by MIT, which found that the overwhelming majority (95%) of firms that adopted GenAI reported no related profits, is just one of a slew of bad omens. “Adoption is high, but disruption is low,” the researchers wrote. “Despite high-profile investment and widespread pilot activity, only a small fraction of organisations have moved beyond experimentation to achieve meaningful business transformation.”

According to Silicon Valley Bank, 58% of 2025 venture capital investment had gone towards AI as of late last month, but a crash could mean widespread economic fallout reaching far beyond the private market. What’s also worrying is how much the large tech companies rely on one another; NVIDIA invests in OpenAI, OpenAI relies on NVIDIA’s chips and Microsoft’s computing, Microsoft needs OpenAI’s models. In other words, if one domino falls, they all do.

While AI’s capabilities are impressive, it’s also shrouded in hype. Try having a conversation about technology – or even about the modern workplace – without it turning to AI and its impact on efficiency. NVIDIA, Meta, Google and Microsoft’s earnings suggest growth and, moreover, an expectation that AI will transform the tech world, but the market has yet to mature.

“Valuations are expanding faster than earnings,” said Nigel Green, CEO of deVere Group, in a press release. “The profitability still has to prove itself. Investors will soon want to see whether AI’s extraordinary promise can be matched by earnings that justify the scale of belief,” he said, and NVIDIA’s $5 trillion valuation suggests that belief is bigger than it’s ever been.

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