Vinod Khosla, the renowned venture capitalist known for backing companies like OpenAI, DoorDash, and Block, has identified a key metric to assess whether the AI industry is in a bubble — and it’s not stock prices. Speaking on an episode of OpenAI’s podcast released on Monday, Khosla argued that financial market fluctuations driven by investor sentiment are poor indicators of real technological progress. "People equate bubble to stock prices, which has nothing to do with anything other than fear and greed among investors," he said. "So I always look at, bubbles should be measured by the number of API calls." API calls — the interactions between software systems where one application requests data or services from another — serve as a direct measure of how actively AI tools are being used. In the context of AI agents and large language models, high API usage signals real-world demand and utility, not just hype. Khosla compared today’s AI landscape to the dot-com boom of the 1990s, when he tracked internet traffic as a proxy for real adoption. Now, he sees API calls as the equivalent benchmark for AI. "If that's your fundamental metric of what's the real use of your AI, usefulness of AI, demand for AI, you're not going to see a bubble in API calls," he said. "What Wall Street tends to do with it, I don't really care. I think it's mostly irrelevant." The concern over an AI bubble has surged in late 2025, with the term appearing in 42 earnings calls and investor conference transcripts between October and December — a 740% increase from the prior quarter, according to an AlphaSense analysis. While some leaders warn of a looming crash, others remain confident. Microsoft co-founder Bill Gates acknowledged AI’s immense value but admitted it’s currently in a bubble. "But you have a frenzy," he told CNBC in late October. "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." Meanwhile, "Big Short" investor Michael Burry has raised alarms in a recent Substack post, arguing that tech giants like Microsoft and Alphabet are pouring trillions into chips and data centers that may soon become obsolete. He claims their spending lacks a clear path to real economic impact. In contrast, Nvidia CEO Jensen Huang has dismissed bubble fears. His company became the world’s first $5 trillion market cap firm in October, fueled by soaring demand for AI chips. Speaking on Bloomberg TV in October, Huang emphasized that AI has evolved beyond hype. "We also know that AI has become good enough because of reasoning capability, and research capability, its ability to think — it's now generating tokens and intelligence that is worth paying for," he said.