JP Morgan boss Jamie Dimon has joined the chorus of warnings over an AI-driven market boom that some fear could go the way of the dot-com crash.
Speaking from Bournemouth, where the bank announced a £350m investment in its local campus, Dimon described himself as “far more worried than others” about a serious market correction within the next six months to two years.
“AI is real and will pay off in total”, Dimon told the BBC, “but most people involved won’t do well. Some of the money being invested will probably be lost”.
The caution echoes a recent alert from the Bank of England’s Financial Policy Committee (FPC) on Wednesday, which highlighted stretched valuations in AI-focused tech companies.
Officials said the market’s current concentration, 30 per cent of the S&P 500 now held by its five largest firms, is the highest in 50 years, likening the situation to the dot-com bubble at its peak in 2000.
Risks mounting
The rapid surge in AI stocks has continued to fuel dealmaking and investment.
OpenAI is involved in roughly $1tn worth of partnerships with Oracle, AMD, and CoreWeave, while Microsoft has pledged £22 billion for AI infrastructure in the UK.
Barclays analysts note that “FOMO (fear of missing out) is in full swing”, though they caution that the “AI spending frenzy and circular funding” are raising bubble concerns.
Lale Akoner, global market analyst at eToro, told City AM: “If sentiment turns, an AI-led sell-off could ripple across global markets. Given the heavy weighting of these stocks in major indices, a correction could hit not just tech, but portfolios, funding conditions, and confidence more broadly”.
Dimon also flagged broader economic and geopolitical risks, noting that the US has become “less reliable” as a partner globally, while rising uncertainty around fiscal policy and central bank independence adds to market instability.
Even so, economists suggest that a pullback might not be entirely negative.
Joe Maher, from Capital Economics, said a snap in AI valuations could narrow the gap between UK and US markets, while Shore Capital’s Martin O’Sullivan argued that a short-term reset wouldn’t erase AI’s long-term growth potential as adoption and monetisation mature.
The warnings come as Chancellor Rachel Reeves places a £30bn bet on US tech investment to drive UK growth, including AI and cloud infrastructure projects.
But if the bubble bursts, ambitious government-backed initiatives and corporate investments could face serious disruption.