Microsoft co-founder Bill Gates has once again cautioned that many artificial intelligence companies with very-high valuations will not survive in what he described as a “hyper competitive” industry. As reported by CNBC, speaking at the Abu Dhabi Finance Week in an interview with CNBC’s Tanya Bryer, Gates said that the investors should brace themselves for corrections as the fear of an AI bubble is intensifying day-by-day. Gates also highlighted that the hyper-competitive nature of AI means that only a fraction of companies will emerge as long-term winners. Gates said that “a reasonable percentage of those companies won’t be worth that much.”
Bill Gates on AI valuations
“AI is the most important thing going on,” Gates said, but stressed that inflated valuations do not guarantee success. “Does it mean all of these companies with high valuations will be winners? No, it’s going to be hyper competitive,” he explained. He added: “AI is only a bubble in the sense that not all of these valuations will end up going up. Some of them will go down… A reasonable percentage of those companies won’t be worth that much.”Companies like Tesla, Palantir presently trade at price-to-earnings ratios above 200 compared with an S&P 500 average of about 25. The disparity has fueled investor concerns, with global markets dipping in November amid fears of an AI bubble.
Bill Gates emphasised that AI remains a transformative force
“AI is a deeply profound technology that will reshape the world. There’s not the slightest doubt about that,” he said. He pointed to AI’s potential in healthcare, education, and agriculture, areas where his foundation is actively investing.Despite all these concerns, Gates has reaffirmed his belief in the transformative potential of AI. He also described it as “a deeply profound technology that will reshape the world,” with applications across health, education, and agriculture.“Is this profound and real and is going to provide all of these benefits? Absolutely, nobody should have any doubt about that,” Gates said. As 2026 approaches, Gates’ vision is clear: AI must be used not just to drive profits, but to deliver tangible benefits for humanity.
