""I think it is a bubble, but bubbles are good for innovation," said Jang. He argued that the term "bubble" is often just finance shorthand for a "new technology wave" that occurs every five, six, seven years. According to Jang, this market heat is functionally necessary: "You need a bubble in technology and startups ... to not only attract the world's best talent to work on a certain set of problems but you also need the capital to fund them.""
"Gao agreed that in certain pockets, "valuations have far outstripped any sort of fundamental" metrics. However, she cautioned against dismissing the trend entirely, noting that the current growth curves "far outstrip the growth curves of companies we've ever seen before," making the total addressable market difficult to calculate. "I don't think we have a good sense of how big some of these companies can ultimately become.""
An AI funding bubble can help accelerate innovation by attracting top engineering talent from established tech companies and supplying the capital required to launch new ventures. Periodic market heat functions as a new-technology wave that drives experimentation and startup formation. Valuations can significantly outpace fundamentals in specific pockets, while unprecedented growth curves make total addressable markets difficult to estimate. Media scrutiny and skepticism can relieve overheating pressure, even as bursting bubbles produce losses. The interplay between infrastructure and workflow investments will influence which companies scale and how long value creation endures.
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