--- title: "Terrified Investors Are Bracing for an AI Bubble “Reckoning”" description: "Investors are already preparing for that type of major tech sell-off amid ongoing fears of a collapse of an AI bubble." date: "2026-01-07" modified: "2026-01-07" authors: - name: "Victor Tangermann" job_title: "Senior Editor" link: "https://futurism.com/authors/victor" url: "https://futurism.com/artificial-intelligence/investors-bracing-ai-bubble-reckoning" categories: - "Artificial Intelligence" - "Ethics" - "Future Society" --- # Terrified Investors Are Bracing for an AI Bubble “Reckoning” ![Investors are already preparing for that type of major tech sell-off amid ongoing fears of a collapse of an AI bubble.]() *Getty / Futurism* Fears over a growing AI bubble that could [wipe out the entire economy]() if it were to burst continue to mount. For many months now, investors and even tech leaders have openly been discussing the possibility — but if or when such a collapse could take place remains a subject of heated debate. Nonetheless, investors are already preparing for that type of major tech sell-off, the [*Financial Times* reports](). The reporting shows that plenty of fear and uncertainty remain over the untold billions of dollars being poured into wildly unprofitable AI ventures — a dynamic that's seen AI companies' valuations skyrocket to record heights, [despite dubious prospects of ever turning a profit](). Some are pulling back on their investments in major tech stocks, while others are outright betting on eventual drops in share prices. "Whether there are excesses... in the equity market on AI is no longer questionable, but to figure out which exact companies will be the losers and when this reckoning will happen is difficult," fund management firm Amundi chief investment officer Vincent Mortier told the *FT*. One investment fund, Blue Whale Growth, sold its Microsoft and Meta stock in the second quarter of last year, with chief investment officer Stephen Yiu telling the newspaper that "we are concerned about the return on investment in some cases, while some of the valuations are insane — especially in private markets." GQG Partners chair Rajiv Jain added that "AI’s massive cash burn remains elevated with very little profitability in sight." His fund sold all of its Magnificent Seven — investor shorthand for Alphabet, Amazon, Apple, Tesla, Meta Platforms, Microsoft, and Nvidia — holdings. "Though we had less exposure to a few Mag 7 names throughout 2025, we exited our remaining positions by early November because the risks of an AI bubble blow-up are growing, in our view," he said. At the same time, many remain unafraid of an imminent collapse. "We don’t believe that we are in a bubble," BlackRock international chief investment officer Helen Jewell told the *FT*, "but investors should prepare for a bumpy ride in 2026." Despite plenty of concerns among investors, banks remain optimistic about future growth. Wall Street has predicted double-digit gains this year. The S&P 500 has [surged a whopping 92 percent]() since October 2022, posting double-digit returns for three years in a row now. "2026 should be another strong year for AI stocks, with capex likely to surpass expectations," JPMorgan's Dubravko Lakos-Bujas [wrote]() in a memo. Others are far more muted about the outlook. Three years on from OpenAI's launch of ChatGPT, some are [starting to wonder]() how long the enormous hype surrounding AI can continue to be sustained. In a 2025 retrospective posted on Monday, Bridgewater hedge fund founder Ray Dalio warned that the tech market is "now in the early stages of a bubble." But a crash, some argue, may still be some ways away thanks to plenty of remaining excitement. "A bubble likely crashes on a bear market," Cetera Financial Group chief investment officer Gene Goldman [told *Bloomberg*](). "We just don’t see a bear market anytime soon." **More on the AI bubble:** [*AI Investors Furious at Suggestion That There’s an AI Bubble*]() ## Author I've been at Futurism since 2017, where my role has evolved to encompass design, writing, and increasingly editing. I've always been fascinated by space exploration and advanced transportation, which I've leaned into by interviewing luminaries in those fields while closely following the dimensions of policy and regulation that allow next-generation projects to succeed -- or, sometimes, to fail. I'm also keenly interested in the effects of generative AI on society, policies, and democratic institutions, as well as clean energy, physics and biology, and the vagaries of tech leadership. My work for Futurism has been cited by publications including Ars Technica, Gizmodo, PC Magazine, Jalopnik, Fox News, and the New York Post. I spent my childhood living in locations including Manila, the Philippines, and Geneva, Switzerland, attended McGill University, and now live in Toronto, Canada. Before Futurism I worked at AskMen and a small photography studio. In my free time, I'm an avid gardener, foodie, and craft beer lover, as well as a maker of artisanal hot pepper sauces. I have a magnificent dog named Freida. ### Author social links [Bluesky]()