Nvidia CEO Jensen Huang recently stated that an AI bubble is coming, but just not right now. Huang stated, “It’s very unlikely in the next five years.” Despite his warnings, Huang said that the challenge is how fast we can build. He noted, “the rate at which we can build the infrastructure is limited by physical things.” Let’s discuss whether an AI bubble is an actual threat.

Nvidia CEO Warns Of AI Bubble: Can We Deter?

Many industry experts have expressed concerns about a potential AI bubble. One of the most prominent voices is that of Micheal Burry. Burry had famously predicted the 2008 housing crisis that triggered one of the worst financial disasters of all time. The analyst has publicly revealed that he has taken short positions on AI companies, including Nvidia. Burry compared the current scenario to that of the dot com bubble of the late 1990s.

Also Read: AI Stocks vs Dot-Com Bubble: What’s Similar and What’s Different?

While a threat of an AI bubble, there are some stark differences between what is happening now and what happened during the dot com bubble. Unlike in the late 1990s, the AI companies of today, like Nvidia, are building real products that have real demand. Despite speculation, the current market is delivering high profits and real cash flow. Nvidia is the current market leader and demand for its chips are skyrocketing.

How To Protect Yourself?

In the event of a bubble burst, there are measures you can take to protect your assets. Nvidia (NVDA) has been the choice of many amid the ongoing AI boom. If things go south, you may want to have a diverse portfolio. Investing in safe havens before the market crashes could be a good bet. Gold and other commodities usually see increased inflows in dire times.

Another way to protect yourself is to be very well informed about what’s going on in the market. Geopolitical tensions often lead to increased investor fears. Park your capital in safe spots in trying times.