There has been much chatter over whether we’re entering bubble territory in AI, and now tech CEOs too have begun speaking up.
Klarna CEO Sebastian Siemiatkowski has said that he’s “very nervous” about the massive investments companies like OpenAI are making in datacenter buildout. He also said that he partially agreed with renowned short-seller Michael Burry, who’d correctly predicted the housing crash in 2008 and has since taken a short position on some AI companies.
“I think [OpenAI] can be very successful as a company but at the same time I’m very nervous about the size of these investments in these data centres,” he said in an interview with FT. “That’s the particular thing that I am concerned about.” Interestingly, Siemiatkowski holds shares in prominent AI companies including OpenAI, Perplexity, xAI and Cerebras through his family office Flat Capital.
Siemiatkowski pointed to the popularity of ChatGPT as evidence of the widespread adoption of AI services. “[But] that’s a different thing than asking myself ‘is it worth putting a $1tn worth into servers’,” he said. “I am concerned that piling that kind of money into data centres may turn out to be not worth it.” Siemiatkowski said he believed that less computing power to run advanced AI was needed than tech companies were planning to spend, as the models themselves were the “most effective compression technology ever invented”, which he argued could run more efficiently over time.
The Klarna CEO claimed that many top executives were saying this, but only behind closed doors. “People have an incentive to say I’m wrong . . . and I feel, behind [closed] doors, people are more concerned about what I’m saying than they are in public,” he said.
“That makes me nervous, because of the amount of wealth that is currently automatically allocated into this trend, without some more thoughtful thinking. “You can say ‘I disagree with the fact that Nvidia is worth that much and I don’t care, some rich people are going to lose some money’. But the truth is, because of the index funds and how this works, your pension right now is going into that theory that it is a good investment,” he added.
Siemiatkowski even brought up Michael Burry, who’d taken short positions against NVIDIA and Palantir. “I partially agree with Michael Burry,” Siemiatkowski said. “The question again is about timing because he’s betting against the whole market.”
Klarna, incidentally, was one of the first movers in adopting AI. In March 2024, Klarna had said that it had developed an AI assistant that was doing the job of 700 human employees. In December the same year, it had said that it had stopped hiring humans because of efficiency gains from AI.
More recently, there have been signs that AI companies might’ve been spending a bit too much money too quickly in order to build AI infrastructure. OpenAI CEO Sam Altman had flared up with asked about the company’s spending commitments in a podcast, and had said that he wished OpenAI were public so that detractors would be able to short sell its shares and then get burned. But some big names have pulled out of their AI investments. Softbank had recently sold off its entire stake in NVIDIA worth $5.83 billion, and then Peter Thiel had also sold his entire $100 million NVIDIA stake.
On the other hand, NVIDIA CEO Jensen Huang has recently argued that unlike traditional software, which is compiled only once, AI-enabled software will need constant inference, so these buildouts are justified. There are also indications that these buildouts won’t necessarily go obsolete when newer chips are launched, but older chips can be used for inference and other workloads. It remains to be seen whether all this AI spending ends up being a bubble, but there seem to be ever more people in the world of tech who are indicating that there’s a significant chance that it could be one.