Artificial Intelligence: A Bubble About to Burst?
- 3d
- 4 min read
Updated: 2d
Since 2022, artificial intelligence has captured a disproportionate share of the financial market: companies linked to AI (Artificial Intelligence) currently account for 90% of corporate capital investment and 80% of the growth of the S&P 500 index. If this apparent AI financial bubble were to burst, how would gold prices respond?
For years, major technology companies expanded with relatively low capital expenditures and limited debt, which earned them exceptional financial prestige. One example is Microsoft, which at various points in its history has issued bonds with a higher credit rating than U.S. Treasury bonds themselves.
That prestige now supports an unprecedented expansion in the technology sector. At the current pace, the cost of building AI data centers will be 15 times the cost of the Apollo program—created to land humans on the Moon—and more than 150 times the cost of the Manhattan Project, whose objective was to develop the first atomic bomb. This cycle, only two years old, is already showing signs of overleveraging. Much of the capital is backed by promises of future profitability rather than actual earnings.
AI: A New Financial Bubble?
The classic warning signs of a financial bubble are already visible.
Extreme concentration of capital flows in just a handful of companies.
Opaque financial structures and off-balance-sheet debt.
Narratives of future growth replacing present cash flows.
Extreme valuations of the sector’s most popular companies.
As an example, as of February 2026, the price-to-earnings ratio (P/E) of Nvidia (NVDA), one of the AI companies most favored by investors, stands between 45 and 47. This means investors are currently paying between US $45 and $47 for every dollar of earnings Nvidia generates today.
AI Companies are Wildly Overvalued at the Moment
To exemplify how extreme the situation is, Nvidia, which makes chips for AI, has nearly five times the value of Walmart, the US largest retailer, but it generates less than one-fifth of Walmart’s revenue.
If the financial results of AI companies do not grow exponentially—and fail to generate sufficient profits to sustain both the massive capital investments already made and the extraordinary valuations of the sector’s leading firms—the adjustment will be severe, and the financial contagion will be deep.
When a Bubble Bursts, Gold Acts as a Safe Haven
Past financial bubbles show a consistent pattern: when confidence in overvalued assets collapses, capital typically migrates toward assets that do not depend on earnings, users, or technological adoption, but rather on scarcity and universal acceptance—such as gold. Recent examples include:
The Dot-Com Bubble (2000–2002): While the Nasdaq index lost nearly 80%, gold began a multi-year rally, rising from US $250 per ounce in 2000 to more than US $750 in 2008—tripling in price over eight years.
The Global Financial Crisis (2007–2008): While the Nasdaq fell 53%, gold rose from US $750 per ounce in 2008 to nearly US $1,900 in 2011, doubling its value in just three years.
Michael Burry, the well-known investor who correctly predicted the 2007–2008 global financial crisis, believes that government intervention will not prevent the bursting of the AI bubble this time. In his view, “The problem is too big to save”, issuing a stark warning about the AI sector.
Although a new financial crisis has not yet materialized, there is growing unease in financial markets and in the global geopolitical landscape. Since 2022, central banks have purchased more than 1,000 tons of gold per year. —double the average of the previous decade—representing roughly a quarter of global gold demand. This wave of buying has coincided with a new surge in gold prices, which rose 64% during 2025, driven by record debt levels, geopolitical tensions, and doubts about the sustainability of the current growth model.
Why Does Gold Recover First?
Every financial crisis tends to follow a predictable pattern:
Immediate liquidation: Everything is sold to obtain liquidity, resulting in a broad decline in asset prices—including gold in the short term.
Capital reallocation: Markets begin separating assets valued on future expectations from those whose value is grounded in real, present financial performance.
Return to safe havens: After a financial crisis, distrust rises and investors seek secure assets to protect their wealth. This is when gold often leads the recovery.
If today’s AI boom develops into a bubble—as suggested by concentration, leverage, and runaway capital spending—it is reasonable to expect the same pattern: a decline in trendy assets and a migration toward safe-haven assets, with gold playing a central role.
Gold: Solid Value in Times of Uncertainty
Artificial intelligence will transform industries, but its rise does not eliminate the risks of a cycle financed by debt, future promises, and an unprecedented concentration of capital. If this excess-driven model triggers a sharp correction, gold is expected to once again reaffirm its position as the asset that does not rely on assumptions, but on tangible and enduring value.
If you believe that investment in artificial intelligence is a bubble about to burst, this may be an opportune time to protect your wealth by investing in gold.
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