{"id":131892,"date":"2025-11-10T09:24:10","date_gmt":"2025-11-10T09:24:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/131892\/"},"modified":"2025-11-10T09:24:10","modified_gmt":"2025-11-10T09:24:10","slug":"is-fashion-ready-for-the-ai-bubble-to-burst","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/131892\/","title":{"rendered":"Is Fashion Ready for the AI Bubble to Burst?"},"content":{"rendered":"

AI is dominating tech conversations right now, and fashion is no exception. It\u2019s being hailed for its potential to fix problems that have plagued the industry for decades \u2014\u00a0from product discovery and personalized marketing to sizing discrepancies among brands. But it costs a lot to invest in, and there are big question marks surrounding whether it can deliver the returns it promises, while its use can also spark consumer backlash<\/a>. In recent weeks, these questions have intensified at a macro level, too.<\/p>\n

Speculation is mounting that we\u2019re living in an AI \u201cbubble\u201d, stoked by soaring tech company valuations, big-ticket deals and record spending on a technology whose promise has not yet translated into significant economic gains. Last week, equity markets in the US, Asia and Europe fell after some of the world\u2019s biggest banks and investors warned that an AI-induced market correction could be on the horizon.<\/p>\n

AI stocks \u2014\u00a0like Palantir, which dropped 8% \u2014\u00a0were among the hardest hit, after the CEOs of Goldman Sachs and Morgan Stanley said on a panel in Hong Kong on Tuesday that a 10-20% drawdown in equity markets was likely in the next one to two years. It comes after the UK\u2019s central bank warned of a \u201csudden correction\u201d in global markets due to investors\u2019 increasing concentration on AI-related tech companies whose valuations \u201cappear stretched\u201d, which could leave markets in danger if AI fails to meet its expectations.<\/p>\n

Are we in an AI bubble? And if so, what should fashion companies do?<\/p>\n

Why a bubble?<\/p>\n

Public and private investor enthusiasm for AI\u2019s potential has reached new highs in the last few weeks, as AI chipmaker Nvidia became the world\u2019s first $5 trillion company, and Apple and Microsoft both passed the $4 trillion mark, as share prices climbed. At the same time, private AI companies like OpenAI and Anthropic reached valuations of $500 billion and $183 million, respectively, in the last couple of months. Venture capital investors have now assigned almost 500 AI startups a valuation of $1 billion or more \u2014\u00a0so-called \u201cunicorn\u201d status \u2014\u00a0according to<\/a> CB Insights, and ChatGPT maker OpenAI has signed a string of megadeals in 2025 totaling $1 trillion with other tech companies \u2014\u00a0including Oracle, AMD, Broadcom, Nvidia, and, this Monday, Amazon \u2014\u00a0to access their compute power to fuel its AI models.<\/p>\n

At the same time, several of the biggest tech companies in the world used their Q3 earnings over the last fortnight to revise their previous AI spending forecasts upwards. All of the so-called \u201cmagnificent seven\u201d tech giants increased their capital expenditure figures from previous estimates, telling investors that they will spend tens of billions more than originally planned on AI infrastructure this year. Microsoft said it spent $35 billion on AI infrastructure in the three months to the end of September, Google parent company Alphabet increased its capital expenditure forecasts for 2025 to between $91 billion and $93 billion, up from $75 billion earlier this year, and Meta said its capital expenditure would reach between $70 billion and $72 billion, as CEO Mark Zuckerberg told investors the company’s strategy was to \u201caggressively front-load building capacity\u201d to prepare for the arrival of AI \u201csuperintelligence\u201d.<\/p>\n

\u201cVast, concentrated sums of money are being invested in companies from Nvidia to Microsoft, all feeding off each other, meaning if one fails, they all fail,\u201d<\/p>\n

Fiona Harkin, director of foresight at Together Group\u2019s The Future Laboratory.<\/p>\n

Fears around a potential bubble stem from the sheer speed at which so much money \u2014 and market concentration \u2014 is focused on AI as an asset, while the technology is yet to deliver on its lofty promises.<\/p>\n","protected":false},"excerpt":{"rendered":"AI is dominating tech conversations right now, and fashion is no exception. It\u2019s being hailed for its potential…\n","protected":false},"author":2,"featured_media":131893,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[220,218,219,61,60,4212,80],"class_list":{"0":"post-131892","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-ie","12":"tag-ireland","13":"tag-latest","14":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/131892","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=131892"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/131892\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/131893"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=131892"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=131892"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=131892"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}