Amazon founder Jeff Bezos has joined the chorus of global leaders cautioning that AI is in an “industrial bubble,” pointing to small startups with a handful of employees securing multi-billion-dollar funding as evidence of investor frenzy.

Speaking at Italian Tech Week in Turin on Friday, Bezos said the AI boom shows all the classic signs of a bubble: stock prices detached from fundamentals, capital chasing every idea, and investors struggling to tell winners from losers.

“This is a kind of industrial bubble,” Bezos said. “Investors have a hard time distinguishing between good ideas and bad ones in the middle of this excitement — and that’s probably happening today.”

Lessons From Amazon’s Dot-Com Era

Bezos recalled how Amazon stock collapsed from $113 to $6 during the dot-com crash even as the company’s fundamentals improved, calling it the hallmark of a bubble. He stressed that what matters is not short-term market turbulence but whether the underlying technology delivers real value.

AI: Real, Transformational, and Inevitable

Despite warning signs, Bezos emphasized that AI is genuine and will ultimately change every industry:

“AI is real, and it is going to change every industry. The benefits to society from AI are going to be gigantic.”

He compared the current surge in AI investment to the biotech boom of the 1990s: many firms collapsed, but breakthroughs produced life-saving drugs. Likewise, Bezos argued, AI’s bubble will leave behind winners that deliver transformative benefits.

“The [bubbles] that are industrial are not nearly as bad. They can even be good, because when the dust settles, society benefits from those inventions,” he said.

Warnings From Across the Industry

Bezos’ remarks echo those of OpenAI CEO Sam Altman, Alibaba cofounder Joe Tsai, Ray Dalio, and C3.ai CEO Thomas Siebel, who have all flagged AI as overheated. Goldman Sachs CEO David Solomon, also speaking in Turin, cautioned that AI-driven valuations will eventually face a “reset.”

Still, Bezos remains optimistic: “There’s never been a better time to be excited about the future.”

Jeff Bezos believes AI is in a bubble — but unlike financial crises, he calls it a productive bubble. The frenzy may create distortions in the short term, but in his view, the technology’s long-term benefits will be “gigantic,” reshaping industries and delivering lasting gains to society.

Related: AI Startup Valuations Soar as Bubble Fears Mount Amid Market Frenzy