Is AI in a bubble, or are today’s soaring share prices backed by real business growth?
In this episode of the Australian Finance Podcast, Owen Rask and Gemma Mitchell unpack what an investment bubble actually is and why price, profit and valuation are different things. Using examples from tulip mania, Beanie Babies, NFTs, pandemic-era puppy prices and Pokémon cards, they explain how scarcity, hype and FOMO can push prices far beyond fundamentals.
The conversation then turns to AI. Owen walks through the extraordinary spending behind data centres and chips, why NVIDIA has captured so much of the industry’s revenue, and how circular financing between chipmakers and customers can complicate the picture. They also revisit Microsoft after the dot-com crash, when investors waited about 15 years to recover the previous share-price peak.
So what happens if the AI bubble bursts? Owen and Gemma explain why the technology is unlikely to disappear, but prices, access and business models could change sharply. They also discuss why selling everything and waiting in cash creates its own risks, especially when the market’s best and worst days often arrive close together.
If elevated prices are making you nervous, this episode offers a beginner-friendly framework for thinking about bubbles, diversification and long-term investing without trying to predict the next crash.
