By Theron Mohamed
Publication Date: 2026-01-29 13:27:00
Rampant speculation and massive overinvestment in AI have created a financial threat of cosmic proportions — and the fallout will be catastrophic, Erik Gordon has warned.
“The AI bubble is almost as big as the planet Jupiter,” Gordon, an entrepreneurship professor at the University of Michigan’s Ross School of Business, said in a Wednesday email to Business Insider.
“When it bursts, the debris will be everywhere,” he continued. “Big, institutional investors will be hit with it, and so will individual investors who bet the bubble would get even bigger.”
Gordon pointed to Microsoft stock, which tumbled more than 6% after the software giant’s earnings beat on Wednesday.
Microsoft’s shares sank “because of the truckloads of cash it is investing in AI,” Gordon said. “That is a warning of the burst to come.”
The cloud-computing titan’s net cash used in investing surged 95% year-on-year to over $57 billion…
