Bill Gates has warned that the current surge in AI investment resembles the dot-com bubble of the late 1990s, cautioning that many startups in the space may ultimately fail. Speaking on CNBC’s "Squawk Box," Gates acknowledged that while the situation isn’t like the speculative frenzy of 17th-century tulip mania, it shares key characteristics with the dot-com era—particularly the rush of capital into companies with little substance. “There are a ton of these investments that will be dead ends,” Gates said. “In the end, something very profound happened. The world was very different. Some companies succeeded, but a lot of the companies were kind of me-too, fell behind, burning capital.” He emphasized that despite the risks, AI represents the most significant technological advancement of his lifetime. “The value is extremely high, just like creating the internet ended up being, in net, very valuable,” Gates said. “But you have a frenzy. And some of these companies will be glad they spent all this money. Some of them, you know, they'll commit to data centers whose electricity is too expensive.” Gates’ comments come amid growing concern over an AI bubble, with investors pouring billions into startups and tech firms racing to develop cutting-edge models. Even OpenAI CEO Sam Altman has voiced caution, warning that investor enthusiasm could be outpacing realistic timelines and outcomes. Still, others argue that the current excitement is justified. They point to AI’s transformative potential across industries—from healthcare to education—and believe the market is accurately pricing in long-term value, not just short-term hype. While the path forward may be rocky, many believe the underlying technology will deliver lasting impact, much like the internet did after its own turbulent early years.