Ed Elson Says the AI Bubble Is in Startups, Not Public Stocks

AI summary

Where does Elson place the AI bubble? Ed Elson says an AI bubble exists, but that it is not in the stock market. He argues that the bubble is instead an AI startup bubble, particularly in private markets.

Which AI companies does he identify as overpriced? Elson identifies OpenAI and Anthropic as the two biggest and most overvalued AI names. He says they planned to go public at valuations of $1.4 trillion and $2 trillion, respectively.

What does he say about public-market comparisons? Elson says applying Nvidia’s current price-to-sales multiple would cut Anthropic’s valuation to roughly $1 trillion and halve OpenAI’s valuation as well. Separately, he says the risks of an AI implosion are already priced into the stock market.