Industry experts eased fears of a near-term artificial intelligence (AI) crash during a Web Summit panel on February 2, saying that while hype and overpricing exist in parts of the market, businesses are already seeing real benefits from AI, supporting long-term growth.
The session, titled ‘Is the AI bubble about to burst?’, was moderated by The Economist’s Middle East correspondent Gregg Carlstrom and brought together industry experts and investors from Silicon Valley and the Middle East to assess whether the surge in AI investment reflects a speculative bubble or a lasting technological shift.
Rajeev Dham, managing director at Sapphire Ventures, said the key test would be whether companies can create real value from AI at scale. Speaking from his perspective as an enterprise-focused investor, he said the industry remains in its early stages but is already delivering measurable returns.
“A lot of people thought last year was going to be the year of agents,” Dham said, referring to autonomous AI systems that can carry out complex tasks. While more advanced systems are beginning to emerge, he noted that most short-term value is still coming from early generative AI tools based on large language models.
Dham said software development, customer support and legal services were among the first sectors to benefit, describing them as “very powerful” use cases that are already producing real returns for companies. These tools, which focus on generating and summarising language, are helping businesses save time and reduce costs, even as more advanced AI agents remain under development.
Tala al-Jabri, founder and managing partner of Wyld VC, addressed concerns that investment may be unevenly spread across hardware, infrastructure and software. While it is too early to identify clear winners and losers, she said large-scale investment in infrastructure is unavoidable.
“We need to build the railways for the 21st century, for the AI age,” she said, comparing today’s AI spending to the early investments that supported past industrial and digital revolutions. However, she warned that some areas remain underfunded, particularly specialised applications and tools built on top of fast-evolving AI models.
“The models are moving so quickly that tooling companies can’t keep up,” al-Jabri said, adding that many promising opportunities exist beyond the most high-profile AI companies. The panel also revisited comparisons with the dot-com boom and bust of the late 1990s. Anand Chandrasekaran, managing partner at Celesta Capital, said the comparison is often overstated. He noted that during the dot-com era, telecom firms built large amounts of unused “dark fibre”, creating infrastructure far ahead of demand.
By contrast, he said, today’s AI infrastructure is being actively used. While some companies may be valued ahead of their fundamentals, he argued this does not amount to a broader market bubble. The discussion also explored why AI adoption remains uneven, particularly in the United States. Carlstrom cited The Economist’s estimate that only about 11% of US workers use AI regularly at work.
Dham said the figure likely understates actual usage because of “shadow AI”, where employees use tools informally without official approval. More broadly, he said AI has yet to be fully integrated into everyday work processes. “The question isn’t why it’s 11%,” he said. “It’s why it’s not 99%.”
Chandrasekaran added that concerns around data security and job losses are slowing adoption, especially in large organisations where influence is still linked to team size rather than AI-driven productivity. Al-Jabri said the Middle East stands out globally due to higher adoption rates driven by proactive government policies. She pointed to Qatar and the UAE, where AI strategies have been embedded across the public sector, including mandatory AI or agent development for government employees in the UAE.
Dham also highlighted a major shift in public markets, with US semiconductor stocks outperforming traditional cloud software companies as investment flows into AI infrastructure. Despite recent market volatility, he said there remains “a lot of room to run” given the rapid growth of AI-driven businesses.
Al-Jabri cautioned, however, that some headline AI valuations are inflated and risk overshadowing smaller but strategically important companies building core AI infrastructure and software.