So, About That AI Bubble
Six months ago, the AI sector faced skepticism over a potential bubble due to massive investments without clear profitability, but recent advancements like Anthropic's Claude Code have driven rapid revenue growth and widespread adoption. AI tools are now demonstrably increasing productivity, particularly in software development, leading to measurable economic impact and reduced concerns about overinvestment. The technology's shift from chatbots to autonomous agents capable of completing complex tasks has marked a turning point in its commercial viability.
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EconomySo, About That AI BubbleThanks to the rise of Claude Code and other AI agents, revenues are finally catching up to the hype.By Rogé KarmaIllustration by Jonelle Afurong / The Atlantic. Source: Javier Zayas Photography / Getty.May 1, 2026, 7 AM ET ShareSave Six months ago, the AI sector was looking pretty bubbly. Companies were plowing hundreds of billions of dollars, much of it borrowed, into building new data centers, but had no clear path to profitability. Experts and journalists, myself included, were comparing the AI build-out to the railroad bubble of the 1800s and the dot-com bubble of the ’90s, in which speculation led to overinvestment that eventually crashed the stock market. Even OpenAI CEO Sam Altman voiced public doubts.
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