Hermann Hauser has seen technology revolutions come and go. As the co-founder of Arm and a veteran technology investor, his latest warning about artificial intelligence deserves attention — particularly because he is not predicting that the AI boom will collapse.
Quite the opposite
Hauser believes AI could create more economic value than any previous technology revolution.
But he also describes the journey ahead as a “rollercoaster”, arguing that some valuations have already raced far beyond what the underlying businesses can reasonably justify.
That distinction is important. The technology can be transformational while the financial markets surrounding it become overheated.
Billions
Billions are pouring into AI companies, data centres, chips and infrastructure. At the same time, some of the industry’s biggest players are increasingly intertwined financially, creating concerns about circular investment — money flowing between chip companies, AI developers and infrastructure providers.
Hauser reportedly believes a correction could therefore be painful, even if the technology itself continues advancing.
Yet he does not see the largest AI laboratories as necessarily being the biggest casualties. Companies with substantial capital and genuine demand for their products may be capable of surviving a market reset.
The bigger question is whether investors have confused technological potential with guaranteed financial returns.
History lesson
History offers plenty of warnings. The internet genuinely transformed the world, but that did not prevent the dot-com bubble from destroying enormous amounts of wealth. Great technology and terrible investment decisions can exist at the same time.
Hauser’s message is therefore neither “AI is a fraud” nor “AI stocks can only go higher”.
It is much more uncomfortable: the revolution may be real — and the bubble may be real too.
For investors, that could be the most important warning of all.