Is AI Really a Bubble? Raoul Pal Answers Straightforwardly

Amid growing speculation about whether the tech sector is going through a speculative phase, Raoul Pal, the renowned voice of Real Vision, has taken a clear stance: the profitability figures in the artificial intelligence industry disprove that catastrophic narrative.

According to his analysis, the numbers speak for themselves. Companies operating in the AI space are reporting substantial increases in their revenues, an indicator that, in theory, should not be present in a traditional bubble. Pal emphasizes that this financial dynamism directly contradicts the patterns we have historically seen in speculative markets.

However, where Pal does identify potential risks is in the venture capital ecosystem. In his view, this branch of investment operates under a different logic: it requires dispersing capital across multiple bets, hoping that a few will achieve exponential returns. This power-law distribution model is inherently speculative and, for Pal, it is the only segment that could genuinely be inflated.

The conclusion is nuanced: while the core AI operations are supported by solid fundamentals backed by real financial results, certain segments of venture capital face greater exposure to speculative adjustments.