Gurley: AI bubble coming, but the underlying wave is real
Bill Gurley, a general partner at Benchmark, expects an artificial intelligence "reset" to hit the market, even as he acknowledges the AI wave itself is genuine.
"When people get rich quick, a whole bunch of people come in and want to get rich too, and that's why we end up with bubbles," Gurley said Monday on CNBC's "Money Movers."
Gurley pointed to economic scholar Carlota Perez's work on technological revolutions and financial cycles. Perez's framework holds that "bubbles only exist when the actual wave is real" - meaning the current AI boom reflects genuine technological change, not pure speculation.
Software stocks face pressure
Software companies have taken the brunt of recent losses. Salesforce and ServiceNow have each dropped roughly 25% so far in 2026, while the iShares Expanded Tech-Software Sector ETF (IGV) is down about 20% this year.
When the reset occurs, Gurley advised investors to identify target prices for beaten-down software stocks and buy aggressively.
AI spending reaches extreme levels
Tech giants are spending at record rates on AI infrastructure and related costs. Amazon, Meta, Google, and Microsoft are projected to spend approximately $700 billion on AI this year alone.
Gurley compared current burn rates to Uber's $2 billion annual burn during his involvement with the company in the mid-2010s. "It's a scary way to run a company," he said of AI firms like Anthropic and OpenAI that are consuming cash at far higher rates.
For finance professionals, understanding these spending patterns and market valuations matters. AI for Finance Courses can provide context on how AI investments are reshaping financial markets and corporate strategy. Those interested in the technical side of these expensive operations may find Generative AI and LLM Courses useful for understanding what drives these costs.
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