Some of the world’s biggest tech firms have soared in value over the last year. As AI evolves at pace, there are hopes that it will improve lives in ways that people could never have imagined a decade ago—in sectors as diverse as health care, employment and scientific discovery.

OpenAI is now worth US$500 billion (£373 billion), compared with US$157 billion last October. Another firm, Anthropic, has almost trebled its valuation. But the Bank of England has now warned of a possible rapid “correction” due to its concerns about these staggering valuation rises.

The question is whether these values are realistic—or based on hype, excitement and unfounded optimism for the potential of AI. Put simply, is AI’s value today a product of what AI will do in future or what people hope it may do? Ultimately, we will only really know if it’s a bubble if it bursts—though the warning signs are evident today.

With hindsight, many things that happen in a bubble may sound exceedingly optimistic. If you take many headlines and replace the word AI with the word computers it often sounds a lot more naive.

But, predicting the path of technological change is hard. Back in 2000, the Daily Mail declared the internet could be a passing fad. Just a few months earlier the dotcom boom had peaked.

A burst bubble may not change the end of the journey. The internet was not a passing fad. However, bubbles are extremely disruptive and affect people in very real ways. Stocks fall, pensions suffer, unemployment rises and investment is wasted. Real potential is crowded out in the hype and mania to focus all investment in a small number of stocks and firms.

Right now, we have the first sign of a bubble—a rapid rise in valuations. If these correct and fall we will have a bubble. If these valuations continue to rise we could be seeing a new sustained market that is focused on the technology of the future.

Of course, it might be that these valuations plateau. What happens then depends on whether people have invested in the belief that prices will always rise.

Consider a situation where people believe—as the Bank of England does—that AI firms’ valuations may be “stretched.” It’s helpful to consider what these valuations are based on. Investment is simply a bet that AI increases profitability for the firms involved. These massive valuations are bets that AI will hugely increase future profitability.

In some cases, these are bets that AI will improve in capabilities towards some kind of “artificial superintelligence” that can do everything a human can do—or more. This could raise the living standards of everyone on Earth. Leading computer scientist Stuart Russell estimates the value of that at US$14 quadrillion—investors are buying a claim on that outcome too.

If investors begin to fear that AI profits won’t materialize, then they will try to get their money back. This realization can appear quite suddenly and can be prompted by seemingly minor events. It doesn’t require a big needle to pop a bubble.

A US article published in March 2000 warned that internet companies were fast running out of money. This caused many people to rethink their investments

At this stage of the bubble, investment excitement had spread to everyday investors. These regular people balanced their fear of missing out with a fear that they were investing in something new that they didn’t know much about. For many, an article in a popular magazine suggesting they may have made a mistake tipped the scales towards caution. They began to sell their dotcom stocks.

In search of profit

It may come as a surprise to some that, despite its increasing valuations, OpenAI does not yet make a profit. It may require ten times more revenue to do so.

A US$500 billion valuation is quite something for a company that reportedly lost US$7.8 billion in the first half of this year. Some of this value appears to flow from a new deal between OpenAI and Nvidia where Nvidia will invest in OpenAI and OpenAI will buy Nvidia chips. This circular financing keeps everything afloat for now, but at some point investors will need to see returns.

AI firms more generally do not appear to be profitable at the moment. Investors are not putting their money into today’s losses—they are betting on an AI future.

It is of course perfectly feasible that AI firms will develop business models to increase their profitability. OpenAI is exploring advertising options and allowing chatbots to recommend products.

Using AI to deliver these messages is a viable option, though they will have to avoid the tricks and manipulations associated with online platforms, such as when hotel websites announce that rooms are about to sell out. We believe that AI can increase the power of these manipulations and we wonder how persuasive chatbots may be in their recommendations.

However, the big four—Meta, Alphabet, Microsoft and Amazon—are this year spending the equivalent of the GDP of Portugal on AI infrastructure. This is not investment in new targeted ads, it is investment in an AI future. The bubble will burst if and when this future is in doubt.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

“[The clutch] is like 1950s technology—it’s really boring,” Westerman said (“boring,” for grid operators, is the highest form of praise). ​“The marginal cost of putting this in is like nothing compared to the cost of the plant.”

A company called SSS has built these clutches for decades. One is nearly operational in the state of Queensland at the Townsville gas-fired plant, which Siemens Energy is converting into what it calls a ​“hybrid rotating grid stabilizer.” Siemens says this project is the world’s first such conversion of a gas turbine of this size.

That particular retrofit took about 18 months and involved some relocating of auxiliary components at Townsville to make room for the new clutch. So it’s not instantaneous, but far easier than building a new synchronous condenser from scratch, and about half the cost, per Siemens.

Some novel long-duration storage techniques also provide their own spinning mass. Canadian startup Hydrostor expects to break ground early next year on a fully permitted and contracted project in Broken Hill, a city deep in the Outback of New South Wales.

Broken Hill lent its name to BHP, which started there as a silver mine in 1885 and has grown to one of the largest global mining companies. More recently, the desert landscape played host to the postapocalyptic car chases of Mad Max 2. Now, roughly 18,000 people live there, at the end of one long line connecting to the broader grid.

Hydrostor will shore up local power by excavating an underground cavity and compressing air into it; releasing the compressed air turns a turbine to regenerate up to 200 megawatts for up to eight hours, serving the community if the grid connection goes down and otherwise shipping clean power to the broader grid.

But unlike batteries, Hydrostor’s technology uses old-school generators, and its compressors contribute additional spinning metal.

“We have a clutch spec’d in for New South Wales, because they need the inertia,” Hydrostor CEO Jon Norman said. ​“It’s so simple; it’s like the same clutches on your standard car.”

Transmission grid operator Transgrid ran a competitive process to determine the best way to provide system security to Broken Hill in the event it had to operate apart from the grid, Norman said. That analysis chose Hydrostor’s bid to simply insert a clutch when it installs its machinery.

The project still needs to get built, but if up-and-coming clean storage technologies could step in to provide that grid security, it wouldn’t all have to come from ghostly gas plants lingering on the system.

“It’s a different feeling [in Australia]—there’s a can do, go get ​’em, ​‘put me in coach’ attitude,” said Audrey Zibelman, the American grid expert who ran AEMO before Westerman. ​“When you’re determined to say how best to go about this, as opposed to why it’s hard or why it doesn’t work, the solutions appear.”

Intel’s future has never seemed so uncertain. But most of the company’s roller-coaster ride of a year has been a lead-up to its next-gen CPU launch, announced this week. The chips will be known as Intel Core Ultra Series 3, codenamed Panther Lake, and they’re being manufactured in its new Arizona-based fabrication plant.

Intel claims the first configurations will ship before the end of the year and then more broadly starting in January 2026. We don’t have a complete lineup yet, but Panther Lake will include up to 16-core CPUs with a “more than 50 percent faster CPU” performance over the previous generation. Intel claims that the new integrated GPU with have up to 12 GPU cores that are also 50 percent faster than the prior generation, boosted by a new architecture.

Intel is fighting back against the stiff competition. Qualcomm dramatically entered the Windows laptop race in 2024 with its Arm-based, highly-efficient Snapdragon X chips, doubling the battery life of current Intel-powered laptops in some cases. While Intel was able to respond to the battery-life competition with its Core Ultra Series 2 V-series chips in late 2024, performance took a hit on these laptops, and the efficiency only applied to flagship, thin, and light laptops. Budget-level and high-performance laptops used a different architecture and therefore didn’t get that same bump in efficiency.

That made shopping for a laptop in 2025 even more head-scratching than normal. These next chips will attempt to fix this problem, with the company promising “Lunar Lake–level power efficiency” and “Arrow Lake–class performance.” Intel really needs to achieve that promise, because with Qualcomm’s Snapdragon X2 Elite having just been previewed and the Apple M5 on the way, the stakes keep rising. —Luke Larsen

Apple’s Next Hardware Launch Is Coming Soon

If you’re thinking, didn’t Apple just have an event? Yes, the company debuted new iPhones, Apple Watches, and AirPods just last month. But rumors are heating up that the company will announce more products this month, focused on iPads and MacBooks. That’s not unusual, as the company has held October events for the past few years, usually for the tablet and Mac lineups. It’s unclear whether this will be an actual event or a silent launch via press release. The company has done both in the past.

So what can you expect? The marquee announcement will revolve around the anticipated M5 chipset, which may debut inside a new MacBook Pro and the iPad Pro. The flagship tablet likely won’t look or feel too different from the prior M4 version. MacBooks are a little more up in the air on launch timing; it could be at this event or early in 2026. If they are announced, it’ll be a new 14- and 16-inch MacBook Pro with an M5, M5 Pro, and M5 Max chip. Apple has also reportedly been gearing up for a budget MacBook launch powered by an iPhone processor, but this may arrive early in 2026 instead.

Other hardware that may debut at this October event includes a new Vision Pro powered by an M4 or M5 chip with a comfier head strap, though it’s otherwise the same as the original headset. There may be a new Apple TV with a faster chipset, the new version of Siri (though this won’t come until 2026), and Wi-Fi 7 support. And we may finally see a second-gen AirTag, with a longer range.

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