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Its not a bubble, were surfing the AI wave

Date:
Thu, 22 Jan 2026 15:07:36 +0000

Description:
Is AI hype a fleeting bubble or a sustained wave reshaping business and
technology?

FULL STORY

Every technological revolution brings both opportunity and uncertainty. The
rapid rise of AI is no exception. Its no wonder, then, that alongside the
excitement and experimentation comes a familiar question: are we heading
towards an AI bubble - and what would happen if it burst? 

Investment in AI has accelerated across predictive, generative, and agentic
technologies as organizations race to capture value. Slaloms research shows
that 62% of UK&I executives expect a return on AI investment within just two
years, a level of impatience that echoes the early days of the internet boom. 

Media narratives mirror this tension, fluctuating between optimism and
warnings of a dot-com style correction. 

The real test now is whether AI can consistently deliver measurable impact 
and move from promise to performance.

AI: Is it a bubble? 

A tech bubble typically refers to over-inflated valuations caused by
speculation rather than fundamentals. In this case, among companies 
developing and delivering AI technology. 

Naturally, share prices fluctuate in every sector, but tech stocks often
remain attractive thanks to ongoing innovation. When interest spikes,
investment follows and anything tied to the latest buzzword risks becoming
overvalued. 

The smaller players especially are most exposed whether through investor
overreach or simply the speed of change of AI evolution outdating products. 
At the same time, new, large players are emerging that could challenge the
future AI landscape. 

The largest technology firms continue to lead the charge. Alphabet, 
Microsoft, Amazon, and Meta are expected to invest nearly $370 billion in
AI-related initiatives this year, a level underpinned by stable growth, 
strong financials, and operational efficiencies. 

Others are seeing similar momentum; NVIDIAs record revenues reflect real
demand for compute infrastructure , and Sam Altman recently claimed that
OpenAI will reach an annualized run rate revenue of $20 billion in 2025 and
has plans to reach hundreds of billions in sales by 2030. 

This lays the groundwork for an IPO with the potential value of up to $1
trillion. If Altmans claim is accurate, this potential price to earnings 
ratio of 50x, while very high, is not unheard of for high growth technology
companies with a strong competitive advantage. 

Even policymakers see this as a structural shift rather than speculation.
Federal Reserve chair, Jerome Powell, recently described the current surge in
AI investment as the beginning of real, profitable businesses  capable of
driving sustained economic growth. 

Encouraging as this may be, it only makes the competition for success 
fiercer. The race to turn AI capability into tangible business impact is
accelerating and only those who can demonstrate value quickly will maintain
momentum.

AI: Is it a wave? 

There's no denying the speed and scale of change. The surge of innovation and
investment in AI feels overwhelming and that intensity naturally suggests
comparisons to a bubble. But if this momentum isnt building toward a burst, 
is it instead a building into a wave? 

With this much hype, its essential to separate substance from noise. Some AI
development is being driven by fear of missing out or board-level mandates
rather than a clear understanding of value. 

Building for the sake of jumping on a trend risks wasted investments and
reinforces the perception of a bubble, even when underlying progress remains
solid. 

Across the industry, however, were seeing AI fundamentally reshape how
software is delivered, modernized, and scaled. The tools and practices
emerging today are shortening development cycles, accelerating legacy
modernization, and enabling new forms of automation that simply werent
possible two years ago. In our work with customers, these capabilities are
already unlocking productivity gains and helping organizations deliver value
faster and more reliably. 

Experimentation remains essential but it must be grounded in a realistic view
of business outcomes. Some initiatives will fail, as they should in a healthy
innovation cycle. Others will redefine how companies operate and compete. 

Slalom data shows 64% of UK&I organizations are creating or planning new
AI-related roles, outpacing expectations of workforce reduction. This
reinforces what economists call Luddite Fallacy  that technological change
tends not to eliminate work long term, but to reshape it and create new forms
of opportunity. 

The pace of change shows no sign of slowing. Most individuals and
organizations have only begun to explore AIs full potential. Its ubiquity,
spanning every role, industry and daily workflow, ensures adoption will 
deepen rather than decline. 

As valuations stabilize and early-stage hype settles, todays bubble will look
more like the progress of a sustained wave of transformation.

AI: In summary 

AI investment trends show characteristics of a speculative bubble, rapid
funding, media hype, and inevitable comparisons to the dot-com era. However,
AI is already delivering measurable value. 

Organizations are moving beyond pilot projects into production-scale
deployments, embedding AI in operations, customer engagement, and
decision-making. The coming phase will test which innovations endure, but the
broader trajectory points to sustained transformation, not collapse. 

Were not watching a bubble inflate; were surfing a powerful, sustained wave 
of technological change. 

 This article was produced as part of TechRadarPro's Expert Insights channel
where we feature the best and brightest minds in the technology industry
today. The views expressed here are those of the author and are not
necessarily those of TechRadarPro or Future plc. If you are interested in
contributing find out more here:
https://www.techradar.com/news/submit-your-story-to-techradar-pro

======================================================================
Link to news story:
https://www.techradar.com/pro/its-not-a-bubble-were-surfing-the-ai-wave

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