Here's how Nvidia's Jensen Huang answers the AI bubble question

By Jules Rimmer

If companies are making money from AI they will want to invest more in it, says the CEO of the world's biggest company.

Jensen Huang dined on fried chicken washed down with beer with the the CEOs of Samsung and Hyundai in South Korea. He doesn't think there is such a thing as an AI bubble.

Fielding questions shouted out by a gaggle of reporters on the sidelines of the APEC summit in South Korea on Friday, Nvidia's chief executive officer, Jensen Huang, took on the question of the day: is there a bubble in artificial-intelligence stocks?

"The best way to think about this is that today, we are really in the beginning of a ten-year build out of a new computing platform, from the old approach to the new," he replied. Huang insisted that AI was no longer just producing applications that were arousing curiosity but it was now "useful for consumers and corporations" and that because "AI is now profitable, that's why investment is going up."

Given this week Nvidia (NVDA) became the first company in history to achieve a market capitalization of $5 trillion, it's unsurprising that Huang would be the focus of media attention and these kinds of questions would be posed.

Huang also was quizzed about whether Nvidia could export the Blackwell AI chips to China, a proposal that has met with stiff opposition within the Pentagon. Huang was diplomatic, and confirmed that while he would like to sell them to China, the final approval would only be forthcoming from President Donald Trump. Huang pointedly observed, however, that the Chinese make plenty of AI chips themselves and its military has wide access to the technology it needs.

Nvidia shares rose in premarket trade after losing ground on Thursday when Trump said there wasn't an agreement yet with China on microchips. The stock is up 51% this year.

As the S&P 500 index SPX approaches the milestone of 7,000 for the first time, driven chiefly by a rally that is extremely concentrated in a handful of megacap tech stocks, debate about the valuations of the sector has intensified. The term "bubble" is bandied about widely and comparisons with previous speculative investment booms are common. On a current price-earnings ratio of 45 times according to FactSet, Nvidia itself is hardly cheap after reaching a $5 trillion market cap.

One argument that has been made against the accusation of bubble valuations has been that while some of the megacap tech stocks have debt, most of the leading AI firms' capital expenditure has been funded by robust operating cash flows. In a report entitled "Should recent AI financing deals be a cause for concern" published by UBS in October, it was pointed out that the Big Four tech firms Alphabet (GOOG), Meta (META), Microsoft (MSFT) and Apple (AAPL) were expected to generate more than $200 billion in free cash flow after capex in 2025.

But now leverage is coming into the picture, after the $30 billion bond issue by Meta , one of the largest ever.

This is the first time a megacap tech stock has borrowed so big and so explicitly to fund AI investment. Morgan Stanley expects $3 trillion of AI infrastructure spending in the next three years, with half of that funded by new borrowing.

Also read: Jensen Huang spreads Nvidia magic to fried-chicken stocks

-Jules Rimmer

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10-31-25 0710ET