Bill Gates has cautioned that some of the world’s most highly valued artificial intelligence companies are unlikely to sustain their current worth, even as the technology reshapes major industries.
Speaking at Abu Dhabi Finance Week, Gates said the AI sector is “hyper competitive,” and many companies with elevated valuations will not emerge as winners.
“AI is the most important thing going on,” Gates told CNBC’s Tania Bryer. “Does it mean all of these companies with high valuations will be winners? No, it’s going to be hyper competitive.”
He noted that fears of a bubble have increased as capital expenditures rise and companies enter circular financing agreements. Gates said AI is “only a bubble in the sense that not all of these valuations will end up going up. Some of them will go down,” although he stressed that AI remains “a deeply profound technology that will reshape the world.”
Some listed technology firms have exceptionally high price-to-earnings ratios. Companies such as Palantir and Tesla have ratios above 200, compared with an average of about 25 across the S&P 500. Global markets dipped in November as concerns about an AI valuation correction gained traction.
Gates said “a reasonable percentage of those companies won’t be worth that much,” but he argued that the long-term promise of AI remains unquestionable.
“Is this profound and real and is going to provide all of these benefits, including the health, education and agriculture that we’re working on? Absolutely, nobody should have any doubt about that,” he said.
Earlier this week, the Bill and Melinda Gates Foundation and several international partners pledged $1.9 billion to fight polio through expanded access to vaccines and stronger health systems.
Gates predicted significant progress in global health next year, powered partly by AI tools that support virtual medical services, agriculture advisory platforms and multilingual systems for African dialects.
“We can take these wonderful pledges that we’ve just got and make sure we use them very effectively,” he said. “It’ll be a year where we’re piloting a lot of those AI tools, the virtual doctor, supporting all the African dialects, the farm advisor.”
He said agriculture remains a major opportunity for AI-driven development across Africa, where smallholder farmers work on limited land and face low productivity. “We want to dramatically raise their productivity, and we see that’s doable,” he said.
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