Sam Altman Says AI Is in a Bubble—Are Crypto “AI” Tokens Next to Pop?
Sam Altman highlights concerns of an AI bubble, warning that overhyped AI tokens could lead to market instability, particularly in the crypto sector. Investors should be cautious.
OpenAI founder Sam Altman warned of an AI bubble that might have profound implications for crypto. Many leading AI tokens might be overvalued, deriving their market presence from generalized hype.
Despite decentralized AI developers’ ambitious goals, massive LLM builders and VC funds are steering this market. Problems at the highest levels could cause nasty fallout for the crypto sector.
How Crypto and AI Impact Each Other
Sam Altman, founder of OpenAI and Worldcoin, is an important figure for both AI and crypto. However, despite the lofty promises he’s made about his company’s software capabilities, cracks are forming in the optimistic picture. In a recent interview, Altman claimed that AI is in a bubble, which might have dire consequences for the market:
“When bubbles happen, smart people get overexcited about a kernel of truth. If you look at most of the bubbles in history, like the [Dotcom crash], there was a real thing. The tech was really important, [but] people got overexcited. Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes,” Altman told The Verge.
So, what’s the evidence for this? Moreover, what are the implications for crypto’s own AI sector? Unfortunately, the concerns are pretty significant.
The market is giving signals that AI infrastructure building is highly undervalued, to be sure. But how was this bullish signal reflected in crypto? Most of the biggest AI tokens have shown poor or erratic performances lately.
Bittensor (TAO) Price Performance. Source:
A closer look at the largest AI tokens adds some further context. Bittensor is building blockchain infrastructure and a market for machine learning tools, but not an LLM. NEAR, which showed encouraging signs this month, is in a similar boat, and other big tokens are outright gimmicks.
In the main, this crypto sector is trailing the biggest AI firms; it’s not a market mover itself. When macroeconomic factors impact the biggest LLM developers, the AI token market falls too. Does this relationship ever go the other way around?
Concerning Data From LLM Builders
For this reason, everyone in crypto should be concerned about Altman’s comments and other warning signs:
Unless you as a user are miraculously comfortable paying $1k for the AI appThe only thing propping up AI is VC funding No VC funding:The AI application layer is unprofitableThe LLM layer is unprofitableThe compute layer is unprofitableThe GPu layer is unsustainable
— Zoomer (@zoomyzoomm) August 14, 2025
Essentially, expert analysts fear that there’s a bubble because VC firms are the only thing keeping this technology operational. Behind the scenes, this technology is incredibly expensive, and it’s not clear if it’ll ever be affordable for consumers. Without a truly practical use case, these platforms can’t support themselves.
One data point is particularly instructive. Ed Zitron, an AI researcher, recently published documents detailing some of the changes between ChatGPT-5 and 4o. To make a long story short, its new “router” system can potentially burn twice as many tokens per query as ChatGPT-4o.
Based on the community’s lukewarm response, the software’s new functionality probably isn’t worth this high cost. If problems like this start reverberating for the biggest AI firms, the corresponding crypto market is especially vulnerable.
I am an expert on bubbles. So it brings me no joy to say that the AI bubble is popping this time next year. When you promise infinite scaling and don’t produce it the calculus changes. I don’t think it will be bad for most companies but those who built their entire business…
— bubble boi (@bubblebabyboi) August 7, 2025
All that is to say, investors should be highly cautious at the moment. This industry is famed for its volatility; many assets, businesses, and software models have burned up in spectacular crashes. An AI bubble might do the same thing to this whole crypto subsector.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Australia Unemployment Rate set to remain at a five-year high of 4.6% in September
Blackstone's AirTrunk Postpones $1.5 Billion REIT IPO: Yield Raised to 6% but No Takers, AI Infrastructure Financing Faces 5.2% US Treasury Yield
AirTrunk, a data center operator under Blackstone, has decided to postpone the listing of its $1.5 billion Singapore Real Estate Investment Trust (REIT) to the first or second quarter of 2027. Rising U.S. Treasury yields and increased market volatility have made investors more cautious; even raising the yield from 5.5% to around 6% has not boosted demand. High capital costs are becoming a major constraint on the expansion of AI infrastructure.
CoreWeave Faces Dual Shock in Stocks and Bonds! Share Price Plummets 15%, Bonds in Trouble, Musk Exclaims "Scary"
Analysts point out that the company borrows at an interest rate of about 9%, but its investment returns are less than 5%. With total debt and lease obligations amounting to $52 billion, there is a risk that its equity value could go to zero. Rising inflation has pushed up long-term U.S. Treasury yields, leading to systemic doubts about the financing logic of capital-intensive AI companies. Prediction platforms now estimate the company's probability of bankruptcy before 2027 at 17%.
Crypto prices
More
