OpenAI chairman Bret Taylor is not naive to the potentially mammoth consequences of a tech bubble, but he said the prospect isn\u2019t without its benefits. The former Facebook CTO and current CEO of AI business platform Sierra shares the opinion of OpenAI CEO Sam Altman that we\u2019re in an AI bubble\u2014but that\u2019s not entirely a bad thing.<\/p>\n
\u201cIt is both true that AI will transform the economy, and I think it will, like the internet, create huge amounts of economic value in the future,\u201d Taylor said<\/a> in the most recent episode of The Verge\u2019s \u201cDecoder\u201d podcast. \u201cI think we\u2019re also in a bubble, and a lot of people will lose a lot of money. I think both are absolutely true at the same time, and there\u2019s a lot of historical precedent for both of those things being true at the same time.\u201d<\/p>\n Altman echoed Taylor\u2019s sentiments last month, warning of big winners and big losers from an AI hype cycle.<\/p>\n \u201cSomeone is going to lose a phenomenal amount of money,\u201d Altman said during a dinner for journalists, The Verge reported<\/a>. \u201cWe don\u2019t know who. And a lot of people are going to make a phenomenal amount of money.\u201d<\/p>\n Taylor and Altman join the chorus of industry giants and economists warning about how the astronomical rise of AI has led investors to overhype companies, inflating them beyond their actual worth\u2014with significant financial consequences. Apollo Global Management<\/a> chief economist Torsten Sl\u00f8k warned in July that the top 10 companies in the S&P 500 are more overvalued<\/a> today than they were during the dotcom era 25 years ago. Alibaba\u2019s chair Joseph Tsai<\/a> and C3.ai CEO Tom Siebel<\/a> have both warned in the last year that we\u2019re entering an AI bubble.\u00a0<\/p>\n The fallout of the dotcom bubble burst in 2000 was weighty: In March, the NASDAQ<\/a> rose to its peak<\/a> of 5,048 units, only to plummet to 1,139.90 units in October, a 77% plummet. The downturn, by the time it ended in 2002, had wiped out about $5 trillion<\/a> in market capitalizations.<\/p>\n Bubble beneficiaries<\/p>\n According to Taylor, it\u2019s worth paying attention to the big winners of the dotcom era when drawing conclusions about the impact of a bubble burst and what it would mean for the tech industry.<\/p>\n \u201cThere\u2019s a lot of parallels to the internet bubble,\u201d he said.<\/p>\n Looking at the successful companies that emerged from the early dotcom era is evidence that just because scores of internet companies were overhyped doesn\u2019t mean the hype wasn\u2019t justified for others, according to Taylor. The dotcom bust had famous flops such as Pets.com, a pet-supplies retailer that went belly-up<\/a> prioritizing rapid growth, and Webvan, a grocery-delivery company that filed for bankruptcy in July 2001<\/a>\u2014but it also produced Amazon<\/a> and Google<\/a>, which have growth to be some of the world\u2019s largest companies, Taylor pointed out. Amazon\u2019s share price<\/a> has grown nearly 15,000% since October 2000, and Google, which was not a publicly traded company in 2000, has similarly grown, reaching a more than $2.9 trillion market cap<\/a>.\u00a0<\/p>\n Moreover, even failed companies like Webvan made their mark on the tech work, Taylor said, paving the way for companies like Instacart<\/a> and DoorDash<\/a> to build upon the retail delivery companies of the turn of the century.<\/p>\n \u201cYou start to look and you say, \u2018Actually, if you look at the GDP of the world, how much has actually been created or influenced by the existence of the internet?\u2019 One could argue that all the people in 1999 were kind of right,\u201d he said. \u201cIt was as impactful on pretty much every measure.\u201d<\/p>\n Taylor indicated there will be winners of the AI boom, but it\u2019s difficult to say what these wins will look like. He pointed to fiber companies, many of which went under as a result of the dotcom bust, but not before making their mark on improving the speed of data. Most famously, Global Crossing, which had a value of $55 billion<\/a> in its heyday, went bankrupt<\/a> in 2002 after failing to find customers to make it profitable.\u00a0<\/p>\n \u201cBecause of the amount of economic opportunity, you just end up with a ton of investors, and some companies will fail and some will succeed,\u201d Taylor said. \u201cIf you look at the people who built out fiber in the early days of the internet, a lot of them went bankrupt, but that fiber ended up getting used, just by the next person or the private equity firm or whatever entity bought it.\u201d<\/p>\n Taylor did not respond to Fortune\u2019s request for comment.\n<\/p>\n