Vinod Khosla has his eye on one AI metric, and it’s not stock prices.<\/p>\n
On an episode of OpenAI’s podcast released on Monday, the famed venture capitalist shared how he’s gauging whether we’re in an AI bubble \u2014 or not<\/a>.<\/p>\n “People equate bubble to stock prices, which has nothing to do with anything other than fear and greed among investors,” he said. “So I always look at, bubbles should be measured by the number of API calls.”<\/p>\n API, or Application Programming Interface calls, refer to the process in which one software application sends a message to another application to request data or to trigger an action. They are a common indicator of digital tools’ use, especially with the rise of AI agents. High API calls can also be a mark of a poor or inefficient product.<\/p>\n Khosla said the bubble shouldn’t be called “by what happened to stock prices because somebody got overexcited or underexcited and in one day they can go from loving Nvidia to hating Nvidia because it’s overvalued.”<\/p>\n The 70-year-old VC, whose notable investments include OpenAI, DoorDash, and Block, compared the AI bubble<\/a> to the dot-com bubble. He said he looked out for internet traffic as a metric during the 1990s, and with AI bubble concerns, that benchmark is now API calls.<\/p>\n “If that’s your fundamental metric of what’s the real use of your AI, usefulness of AI, demand for AI, you’re not going to see a bubble in API calls,” he said. “What Wall Street tends to do with it, I don’t really care. I think it’s mostly irrelevant.”<\/p>\n Concerns that the AI industry is overvalued because of massive investments became one of the buzziest themes in the second half of 2025. The phrase “AI bubble” appeared in 42 earnings calls and investor conference transcripts between October and December \u2014 a 740% increase from the previous quarter, according to an AlphaSense analysis.<\/p>\n Top business leaders remain split<\/a> about whether the bubble is about to burst.<\/p>\n