Ex-Intel CEO Warns AI Boom Fueling Markets Is Illusory

Former Intel CEO Pat Gelsinger warned that the biggest players in artificial intelligence (AI) are now funding their own growth, meaning the AI boom fueling markets may be somewhat illusory, Grace O’Donnell reported for Yahoo Finance.

Those big balance sheets are being used “in a creative way,” Gelsinger said, but they create the illusion of unstoppable demand. (Photo: Intel Corporation)

“The quality of that revenue that they’re committing in the future simply isn’t as good, right? Because essentially, I’m buying my own future revenue,” Gelsinger, now executive chairman at xLight, said on Yahoo Finance’s Market Catalysts.

“Because rather than you putting your capital at risk, I’m putting my capital at risk.” Deals, investments, and credits are ricocheting between Microsoft, OpenAI, Google, Anthropic, and Amazon, forming what Gelsinger calls “circular financing.”

The result is an ecosystem where AI providers are effectively underwriting their own growth. That may make headlines, but it raises questions for investors counting on real-world adoption and sustainable margins.

Those big balance sheets are being used “in a creative way,” Gelsinger said, but they create the illusion of unstoppable demand — even though corporate buyers, regulators, and the power grid struggle to keep pace.

He added that demand funded by vendors isn’t the same as customers opening their wallets.

Still, he’s not sounding alarms, noting that the main players are “healthy companies with healthy balance sheets.”