Venture capitalist Bill Gurley sees the artificial intelligence boom as a genuine technological shift, but one that has created a financial bubble destined to pop. In a Monday interview with CNBC, the Benchmark general partner observed that rapid wealth creation in the sector has drawn a crowd of investors hoping for similar returns, a classic precursor to a downturn.

Gurley pointed to the research of economist Carlota Perez, whose work on technological revolutions details how legitimate waves of innovation often generate speculative excess. "Bubbles only exist when the actual wave is real," he noted, suggesting the current AI fervor fits this historical pattern.

His advice for the inevitable reset? Be prepared. Gurley recommends that investors identify target prices for high-quality software companies whose stocks may be unfairly battered in a sell-off, and be ready to buy. A seasoned voice in Silicon Valley, Gurley was a central figure in Benchmark's early investment in Uber and the board-led ouster of its co-founder, Travis Kalanick, lending weight to his market predictions. His message is clear: the AI revolution is substantive, but its financial markets are overheated and due for a correction.

Source: CNBC