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There may be an AI bubble forming, but everyone in Davos is convinced they won't be the ones left holding the bag.

Why it matters: Businesses are investing almost unfathomable sums in AI, but there is a growing sense that at least some companies won't be able to recoup their massive investments.

The big picture: AI remains the talk of Davos as CEOs and political leaders remain convinced that the technology is leading to a massive societal shift. 

The other side: Even if you agree AI is real and significant, the internet was real, too, and that didn't prevent the dot-com bust.

While mood and sentiment certainly play a role in the timing of when boom turns to bust, the driving factor is the economics, namely whether too much was invested too soon to produce a reasonable return.

Zoom in: So who is safe and who is vulnerable if the tide turns? If you ask the big guys, they will be fine. 

Google, for example, points to the fact that it can spread the cost of its massive investments across its consumer and enterprise businesses, whether it's via ads on YouTube, subscriptions to Gemini or big businesses renting compute from Google Cloud.

"We maximize the return on investment we're getting and that allows us to have real strength financially, to continue to invest going forward," Google Cloud CEO Thomas Kurian said during an interview at Axios House Davos.

Others claimed they would be insulated because they aren't building the infrastructure and can pay as they go instead.

"SAP is very capex-lean," SAP executive board member Thomas Saueressig told Axios Friday on the sidelines of the DLD conference in Munich. "We benefit from the R&D efforts and the investments our partners are doing."

Writer CEO May Habib pointed to the biggest AI labs — Anthropic and OpenAI — as the ones most at risk.

"When you look at either of the big labs right now, they're both basically valued at more than Salesforce plus Adobe plus Databricks plus Snowflake," Habib said on stage at Axios House on Monday. "That's hard to kind of wrap your head around, because those other companies are working really, really hard to bring AI to their customer base."

Snowflake CEO Sridhar Ramaswamy warned, however, a bubble burst would have sweeping impacts.

"If there is a correction, then the entire stock market, including the valuation of our company, including Snowflake, is going to go down," he said on stage at Axios House on Monday.

"On the other hand, in terms of good bubbles and bad bubbles, if this bubble results in a reinvigoration of the power sector, which as you know, is not something that's been attractive for investments, that's actually a net positive for all of us."

Zoom out: In a few decades' time, all of the investment will have been worth it, many execs agreed.

"We're talking about a technology that can augment and maybe even replace human intelligence," Emerald AI CEO Varun Sivaram told Axios. "In the long run, my bet is that we have built less than 1% of all the compute that we will need as humanity, and we will almost never stop needing more compute."

"We don't regret railroads, telecom fiber ... all the build-ups of this kind that we've done in history, we have ended up feeling great about," Meta CTO Andrew Bosworth said during an interview at Axios House Davos.

Yes, but: Plenty of companies won't survive long enough to reap the rewards, Bosworth acknowledged.

Between the lines: Bosworth points out that consumers will win regardless, given all the compute power that is being unleashed.

"I think consumers and societies are ultimately the beneficiaries of this tremendous land grab of power, data centers and GPU capacity and whatnot," he said.

What we're watching: Obviously everyone is waiting for signs of a bubble popping. But also important is just how long any downturn lasts before the next upswing.

NTT Data CEO Abhijit Dubey says his company is rare in that it sees both the demand and supply side of the AI industry because it both builds data centers and offers significant technology services to large companies that would use AI.

"We see where enterprises are on their adoption journeys and where it is at low levels," Dubey said, noting that the buildout of data centers is outpacing enterprises adopting AI.

However, he said he expects any correction to be short-lived, with companies adopting AI far faster than past tech shifts, such as the 10-year move to the cloud.

Axios' Amy Harder contributed to this report.

In Davos, the AI bubble is always someone else's problem

AI remains the talk of Davos as CEOs and political leaders remain convinced that it's leading to a massive societal shift.

Three people speaking into microphones at an event. Left: woman with dark hair wearing a black outfit smiling. Center: man with glasses and white shirt speaking expressively. Right: bald man with glasses and beard wearing dark suit.

Writer CEO May Habib, Snowflake CEO Sridhar Ramaswamy and Meta CTO Andrew Bosworth. Photos: Dani Ammann Photography for Axios

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DAVOS, Switzerland — Organizations and corporations should adapt to withstand shifting geopolitical headwinds and insulate themselves from the turbulence, CoreWeave co-founder and CEO Mike Intrator said at the World Economic Forum last week.

The big picture: As geopolitical uncertainty increases and alliances fray, top officials need to build business strategies that diversify portfolios and ensure long-term economic stability.

Axios' Ina Fried and Dave Lawler spoke to Intrator and Ray Dalio, Bridgewater Associates' founder and Dalio Family Office's founder and mentor. The conversations were sponsored by Mubadala Investment Company and MGX.

Driving the news: Chip developer Nvidia announced it would be investing $2 billion in CoreWeave, further solidifying the cloud company's central role in the AI boom.

What they're saying: "We are building our infrastructure in response to signed contracts with long-term demand," Intrator said.

We look at "inference," Intrator explained — a signal that shows an AI model is being actively used — to confirm there's demand before moving forward.

Yes, but: "I'm not buying GPUs until Microsoft or Meta or Nvidia … comes and signs a contract with me," Intrator added.

Relying on the creditworthiness of the organization helps "insulate my company" from pockets of risk, he said.

What's next: "The geopolitical order is changing," Dalio said.

"Whoever wins the technology war will win the military [and] geopolitical war. They're going to win the economic war."

In View from the Top conversations, Marc Antaki, Mubadala's deputy chief strategy and risk officer, and MGX CIO of artificial intelligence Ali Osman spoke to AI Leadership Lab moderator and host Ryan Heath.

"Resilience at Mubadala comes from three things: a resilient strategy … a resilient portfolio … [and] resilient institutions," Antaki said.

"Making sure that you have compute, the right geographies, the right scale, backed by the right hyperscalers, built by the right developers … is critical to the success of the industry," Osman told Heath.

Go deeper: Watch the full interviews on YouTube.

Axios House: Internal changes can protect against external forces, CoreWeave CEO says

Organizations and corporations should adapt to withstand shifting geopolitical headwinds and insulate themselves from the turbulence

CoreWeave's Mike Intrator speaks to Axios' Ina Fried on stage at Axios House in Davos.

CoreWeave's Mike Intrator speaks to Axios' Ina Fried on stage at Axios House in Davos. Photo credits: Dani Ammann Photography for Axios

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DAVOS, Switzerland — Surrounded by headlines about threatened tariffs and talk of a new global order, an American port official at an Axios House event last week put it plainly: "Our job is to remain resilient … be the adult in the room."

Why it matters: World Economic Forum attendees had front-row seats to fraying diplomatic relationships, deals and alliances.

Axios' Amy Harder and Dave Lawler spoke with Noel Hacegaba, CEO of the Port of Long Beach in California, and U.S. Ambassador to Greece Kimberly Guilfoyle. The conversations were sponsored by Tourise.

Driving the news: A chaotic four-day span in the global markets was capped by President Trump touting a "framework of a future deal" with NATO after announcing 10% tariffs on eight allies over his push for the U.S. to acquire Greenland.

"What [President Trump] has done is use tariffs very successfully … as a negotiating tool, strategically, to be able to level the playing field," Guilfoyle told Harder.

What they're saying: "The only certainty really is uncertainty," Hacegaba said.

"Our job is to remain resilient, to remain calm, be the adult in the room, and encourage our shippers and partners not to overreact, not to panic."

By the numbers: The Port of Long Beach generates "almost 3 million jobs across the country and moves $300 billion worth of goods each year," according to Hacegaba.

Hacegaba said the port plans to double cargo volume by 2050.

The bottom line: "We have proven time and time again to be the strongest, smartest, most strategic ally flat out in the world globally," Guilfoyle said of the U.S.

In a View from the Top segment, H.E. Ahmed Al-Khateeb, Tourise chairman and Saudi Arabia's tourism minister, emphasized the role travel plays in the global economy.

Tourism represents "10% of the global economy" and "10% of global jobs — 357 million jobs," with 45% held by women and 80% by youth, he said.

Axios House: U.S. trade and tourism officials urge calm, point to bright spots

U.S. trade and tourism officials urge calm

Two women seated on stage at Axios House event, holding microphones; one in a red suit, the other in white top. Audience watches with Axios logos on blue screens behind them. 

U.S. Ambassador to Greece Kimberly Guilfoyle speaks to Axios national energy correspondent Amy Harder at Axios House in Davos. Photo credits: Dani Ammann Photography for Axios. 

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DAVOS, Switzerland — Companies that publicly tout their quick embrace of AI often are facing private challenges, Mistral AI co-founder and CEO Arthur Mensch said in conversation with Axios' Ina Fried at an Axios House event last week.

Why it matters: Corporations are eager to lead in AI and see a return on their investments, but prioritizing strategy and not speed appears to be the best way to get there.

Axios' Fried, Mike Allen and Courtenay Brown spoke with Mensch and Bank of America chair and CEO Brian Moynihan at the event, which was sponsored by KPMG.

The big picture: "The question going forward is, with a new set of technologies … and a new set of efficiencies, how do people feel? And if you ask young colleagues and teammates, they're worried about it," Moynihan said to Allen and Brown.

As part of the company's AI plan, Moynihan said Bank of America holds listening sessions with employees to ask, "How can we make your work better?"

Between the lines: "Enterprises will have a tendency to say that they're adopting fast, but if you go internally, in general, there's a little more friction than that," Mensch said.

"But where we see success is when companies go with a certain function to fully automate and fully reorganize their own AI processes and AI management, and that's especially true in supply chain."

Applying AI in supply chains can yield up to an 80% improvement in dispatching containers, he said.

State of play: "What we've seen from a competitive perspective in the last year is that we took the leadership in releasing open-source models in the West, meaning Europe and the U.S.," Mensch said.

"We've been mostly head-to-head with Chinese companies that are releasing extremely strong models, and effectively that competition has led us to be around two, three months away from the closed-source model."

"There are a lot of countries that are also looking for an alternative to U.S. providers and to Chinese providers, and we provide that edge."

In a View From the Top conversation, KPMG U.S. deputy chair and managing principal Atif Zaim said many of the corporate officials he spoke with at Davos asked about what's next for AI and when they might see a return on their investment.

"To be sure, everyone is very still gung-ho on investing," Zaim said. "We just had the CEO Outlook Survey, 85% of CEOs want to continue investing, it's going to be their top priority."

"We've also had some of them, still a majority, that are saying even if there is a recession or economic headwinds, they're going to continue investing in it."

Axios House: "There's a little more friction" as businesses race to adopt AI, Mistral AI CEO says

Companies that publicly tout their quick embrace of AI often are facing private challenges, Mistral AI CEO Arthur Mensch said at an Axios House event.

Two people seated on beige chairs on a stage with blue curtains and multiple 'AXIOS' logos on screens behind them. One man in a suit speaks into a microphone, a woman in glasses and a pink sweater holds a microphone and papers.

Mistral AI's Mensch in conversation with Axios' Ina Fried on the Axios House Stage. Photo: Dani Ammann Photography for Axios.

DAVOS, Switzerland — Widespread access to benefits and safety standards around AI is a collective responsibility, said industry leaders at a Jan. 21 Axios House event.

Why it matters: When the public feels the negative consequences but doesn't reap the rewards, "that will be an organ rejection when it comes to embracing the technology," TIAA president and CEO Thasunda Brown Duckett said.

Axios' Courtenay Brown and Ina Fried spoke with Brown Duckett, Google DeepMind co-founder and CEO Demis Hassabis, IBM vice chairman Gary Cohn and U.S. Trade Representative Jamieson Greer. The conversation was sponsored by ServiceNow.

Zoom out: Concerns about equity apply not only to financial benefits but also to resources and community impact.

"We're starting to see the issue of water. We're starting to see the issue of electricity prices. These are real fundamental issues," Cohn told Brown.

"We need to get our act together quickly on things like international cooperation, at least some kind of minimal safety standards," Hassabis said.

Zoom in: Preventing AI-exacerbated inequality "starts within your own company," Brown Duckett told Brown.

"Are you taking a look at your wages? Are they competitive? Are you still recruiting on campuses?"

"We have to make sure: How will everyone be able to have an opportunity to benefit?"

The bottom line: "There's a bigger picture at stake of safety overall and stewarding AGI safely into the world for the benefit of everyone," Hassabis said.

In a View from The Top conversation, ServiceNow.org president and ServiceNow chief corporate affairs officer Vanessa Smith warned that failing to address inequality early risks repeating past mistakes: "History tells us what happens when those divides widen."

Axios House: Equity is fundamental to AI's success, execs say

Widespread access to benefits and safety standards around AI is a collective responsibility

TIAA's Thasunda Brown Duckett appears onstage with Axios' Courtenay Brown at Axios House in Davos.

TIAA's Thasunda Brown Duckett appears onstage with Axios' Courtenay Brown at Axios House in Davos. Photo credits: Dani Ammann Photography for Axios. 

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DAVOS, Switzerland — Leaders in the health care and tech space said transparency, feedback and narrative play a crucial role in building provider and patient trust in AI, during a Jan. 20 Axios event.

Why it matters: Health care AI has the potential to help improve patient outcomes and lower the risk of physician burnout.

Axios' Courtenay Brown moderated the Expert Voices conversation, which was sponsored by Philips.

What they're saying: Trust in health care AI is particularly low, said Vanessa Parli, managing director of programs and external engagement at the Stanford Institute for Human-Centered AI (HAI).

Using the word "productivity" about AI can be a deterrent to providers because it may imply less time seeing patients, according to Eric Cioè Peña, Northwell Health vice president and the founding director of its Center for Global Health.

"Trust is a narrative problem first, and a technology problem second," added Hugh Taggart, CEO of Weber Shandwick's EMEA region.

By the numbers: A survey from Philips found a gap between providers (63%) and patients (48%) when it came to optimism about AI improving patient outcomes.

Yes, but: Keeping humans in the loop has been key to successful implementation strategies at Mayo Clinic, said Matthew Callstrom, physician lead of AI and strategy at Mayo Clinic.

"When you start to explain to patients how we're using AI, they're like, put me in," Callstrom said.

This has helped on the provider side as well, he said. For instance, a volunteer innovation team at Mayo built and tested an AI-driven handoff tool for the transition between nurse shifts. It has since been adopted by 75% of the nurses, generating hundreds of thousands of summaries.

What's next: The industry should "think about it in terms of what we know, from research, drives trust: accountability [and] transparency," American Psychological Association CEO Arthur Evans said.

Anthropic's Claude for Healthcare is "building connectors to key data sources that we know are trusted, like the CMS coverage database or the National Provider identification registry," said Elizabeth Kelly, head of beneficial deployments.

"The systems should be very forthcoming with what they will not do," Peloton CTO Francis Shanahan said.

"You need to design [the technology] in a way so that the consumer understands what the implications of the technology are," Parli added.

"Three out of every four patients say they wait over two months for specialty care," Philips chief innovation officer Shez Partovi said. "Of those, a third of them — while they're waiting — end up in a hospital."

"We're putting AI into everything … from toothbrushes to MRI scanners and angio equipment, because it actually helps automate the procedure and … improve access."

Axios House: Trust presents the biggest challenge in health care AI, industry leaders say

Leaders in the health care and tech space said transparency, feedback and narrative play a crucial role in building provider and patient trust in AI

Axios reporter Courtenay Brown moderates a conversation about earning trust in the age of AI.

Photo credits: Dani Ammann Photography for Axios.

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DAVOS, Switzerland — Companies are making a positive impact with investments in nature preservation efforts, speakers said at an event at Axios House this week.

Why it matters: One of the biggest challenges to environmental protection efforts has been the high price tag of clean energy and conservation projects.

Axios' Amy Harder spoke with Energy Impact Partners founder and managing partner Hans Kobler, Colossal Biosciences CEO and co-founder Ben Lamm, The Nature Conservancy CEO Jen Morris, and The Conservation Fund president and CEO Larry Selzer at the event, which was sponsored by Cox Enterprises.

What they're saying: The "unit economics" for many clean technologies today are better than ever before, Kobler said, which is "the best recipe to actually get to a clean future."

Follow the money: Selzer likened The Conservation Fund to "the investment bank for conservation in America."

The nonprofit is backed by companies like IKEA, Cox Enterprises and Apple, which he said "see the power of private capital to drive conservation forward."

"Conservation is alive and well, it's thriving. But it's this integration of business and the environment."

Between the lines: "Right now in the United States, obviously, climate change is not something that we talk about a lot anymore in most circles. But nature does have a pass," Morris said, adding that nature conservation is a nonpartisan issue.

"As public money shrinks, I think private philanthropists realize they need to step into the breach," she said.

The private sector is also stepping up, she said, as they see the value of conservation to their supply chains.

By the numbers: The U.S. has lost over 20 million acres of forests over the last 30 years, Selzer said. "The Conservation Fund is keenly focused on protecting what remains, and toward that end, we've deployed over $1 billion to acquire over 1 million acres of working forests."

The intrigue: Lamm's startup Colossal Biosciences is trying to bring back extinct species. In addition, the company has a nonprofit foundation arm that has raised $100 million for wildlife conservation and ecosystem restoration.

"We actually have more conservation projects going on than de-extinction projects," Lamm said.

"[T]he technologies on the path to de-extinction are being applied to conservation today – and we're going to lose half of biodiversity in the next 25 years, but nobody talks as much about that."

What we're watching: "I think what is on the agenda more than ever is that we need to create power that is affordable, and that is available to power this economy, to power AI," Kobler said.

From a climate perspective, AI's urgent and immense power needs are a short-term downside. "In the mid-term to long-term, it will be a positive," because it will drive energy efficiency, he said.

In a View From the Top conversation, Cox Enterprises chair and CEO Alex Taylor explained why he decided to devote much of his time and attention to conservation efforts. "It matters what you do with your money," he said. "This is just a topic that is important to me."

"Everything is AI – AI this, AI that," he said. "And AI is important, and AI might help us make the planet OK – but in the meantime, it would be nice if 10, 20, 30 of these companies up and down the Promenade had a significant message about what they're trying to do to clean up the oceans, get the plastic out, what they're trying to do [for] regenerative agriculture, soil management, landscape protection."

Disclosure: Cox Enterprises is the owner of Axios Media, which has editorial independence.

Axios House: Protection efforts are "alive and well," The Conservation Fund CEO says

Companies are making a positive impact with investments in nature preservation efforts, speakers said at an event at Axios House this week.

Panel discussion with three people seated on stage under blue AXIOS House banners, speaking to an audience in a dimly lit room with wooden armchairs and microphones.

Larry Selzer, Jen Morris and Amy Harder in conversation on the Axios House stage. Photo: Dani Ammann Photography for Axios.

DAVOS, Switzerland — As Formula One grows into its newly minted status as an audience favorite and popular investment opportunity, regulatory changes behind the scenes are set to shake up the sport's next season, racing executives said at a Jan. 20 Axios House event.

Why it matters: Some industry stakeholders foresee a massive impact from the changes, which are expected to lead to speedier cars and renewed competition among the teams.

Axios co-founder Mike Allen spoke with Oracle Red Bull Racing CEO and team principal Laurent Mekies and Carlyle CEO Harvey Schwartz at the event, which was produced in partnership with The Race Media.

Context: Red Bull Racing and Carlyle announced a partnership in September of last year, under which Carlyle branding will appear on Oracle Red Bull Racing cars as well as other places. "There's 800+ million fans of F1, and the trajectory of growth is extraordinary," Schwartz said.

The partnership between the two felt quite natural, Schwartz said. When considering what type of business partnership to pursue, the people had to feel right.

"It was immediate – the connection in terms of 'Hey, we can do more than just be economic partners. We can be real partners.'"

What they're saying: "The sport is about to enter the biggest regulation change in history," Mekies said.

"[W]e are going to change both the engine and the chassis regulation at the same time."

The pecking order among Formula One's ten teams may change as they are thrown "into the complete unknown" with these changes, he added.

What we're watching: "Expect the unexpected," Mekies said when asked how Formula One will be different this season. Some outsiders may suddenly be "leading the field."

Axios House: Racing faces "biggest regulation change in history," Red Bull team principal says

As Formula One grows into its status as an audience favorite and popular investment, regulatory changes are set to shake up its next season.

Three men holding microphones sit on armchairs on a stage with blue curtains and screens displaying "THE RACE" and "AXIOS" logos. Audience heads are visible in foreground.

Harvey Schwartz, Laurent Mekies and Mike Allen converse on the Axios House stage. Photo: Dani Ammann Photography for Axios.

DAVOS, Switzerland — McLaren Racing CEO Zak Brown is "motivated a bit by the fear of failure" as a leader in the highly competitive world of motor racing, he said at an event at Axios House this week.

Why it matters: Formula One has captivated audiences worldwide, leading to a stream of investment from brands eager to partner with the franchise's leading teams.

The Race Media founder Darren Cox spoke with Brown at the event, which was produced in partnership with The Race Media and sponsored by Lead Edge Capital.

What they're saying: "It's an unbelievably competitive sport – 2% separates the best from the worst," Brown said.

"Everything is a competition, on the track, off the track, for partners, for employees, for technologies," he said.

Every team has ups and downs, which he said is both nerve-wracking and motivating.

"We've won the last two championships," Brown said. "I really want to keep that going, but I know it's a matter of when, not if, that you get knocked off the top of the mountain. So you just need to dust yourself off and go again."

State of play: Partnerships with B2B and tech brands help McLaren run its business and cars better, and consumer brands help boost fan engagement, Brown said.

McLaren is very interested in who it partners with, he said. "Our partners are very much integrated into our racing team."

The bottom line: Formula One and McLaren's global growth is capturing investors' attention, and it doesn't look as if that is going away any time soon.

"I think the sport has always been global and huge," Brown said. "It's only 11 teams now, most other sports have 20 to 30 teams … and now that every team has the opportunity to be profitable and competitive, [that] has made it very attractive. So you see the investors that have come in are high-quality investors."

In a View From the Top conversation, Lead Edge Capital founder and managing partner Mitchell Green said that for elite teams, "at the end of the day, it's all about the people."

For companies to sustain high performance, "I think you have to evolve with time," Green said. "It's also about hiring creative people [who] can adapt over time in a world we're living in that is constantly changing."

"You have to be willing to try to disrupt yourself, and a lot of companies are not able to do that."

Axios House: "Everything is a competition," McLaren Racing chief says

McLaren Racing CEO Zak Brown is "motivated a bit by the fear of failure" as a leader in the highly competitive world of motor racing.

Two men in suits seated on beige armchairs having a discussion on stage with blue curtains and screens displaying race car images, and a sign reading "AXIOS HOUSE" in the center.

Zak Brown talking with Darren Cox on the Axios House stage. Photo: Dani Ammann Photography for Axios.

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In Davos, the AI bubble is always someone else's problem

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