AI Bubble to Be Short-Lived, Rebound Stronger: NTT Data Chief

A potential artificial intelligence bubble will deflate faster than past tech cycles but give way to an even stronger rebound as corporate adoption catches up with infrastructure spending, the head of Japanese IT company NTT DATA Inc. said, Divya Chowdhury reported for Reuters.

NTT Data CEO Abhijit Dubey believes that, with demand for compute still running ahead of supply, “supply chains are almost spoken for” over the next two to three years. (Photo: NTT Data)

Despite concerns around supply chains, the trajectory is clear, CEO Abhijit Dubey said in an interview with the Reuters Global Markets Forum.

“There is absolutely no doubt that in the medium- to long-term, AI is a massive secular trend,” he said. “Over the next 12 months, I think we’re going to have a bit of a normalization … It’ll be a short-lived bubble, and (AI) will come out of it stronger.”

With demand for compute still running ahead of supply, “supply chains are almost spoken for” over the next two to three years, he said. Pricing power is already shifting toward chipmakers and hyperscalers, mirroring their stretched valuations in public markets, he added.