Steve Hanke, a renowned economist, professor at Johns Hopkins University, and former trader, has issued a cautionary warning about the current AI boom, calling it “overhyped” and potentially “dangerous.” The veteran economist, who previously served as an economic advisor to President Ronald Reagan and led Toronto Trust Argentina—once the world’s top-performing mutual fund in 1995—says the excitement surrounding artificial intelligence may be dangerously misplaced. In a recent email interview with Business Insider, Hanke expressed agreement with Yann LeCun, Meta’s former chief AI scientist and a foundational figure in deep learning. LeCun recently delivered a critical assessment of large language models (LLMs) like ChatGPT, stating in a spring 2024 speech that these systems are often mistaken for intelligence due to their fluent language use, but in reality, their grasp of the real world is “very superficial.” He went on to argue that LLMs are not on the path to human-level intelligence, calling them “an off-ramp, a distraction, a dead end.” Hanke echoed this skepticism, declaring that AI is “overhyped and potentially dangerous.” He emphasized that the market’s current enthusiasm—driven by soaring valuations and massive investments—may not be grounded in sustainable fundamentals. “It might be wise to buckle your seat belt,” he said last October, noting that whether the AI frenzy is rational or not will ultimately depend on whether the revenue projections from AI companies actually materialize. Despite recent market volatility, the AI sector remains on a powerful growth trajectory. OpenAI, the creator of ChatGPT, reportedly nears a $100 billion fundraising round at a potential $850 billion valuation. The company crossed $20 billion in annualized revenue last year, signaling strong commercial momentum. Meanwhile, the “hyperscalers”—Meta, Amazon, Alphabet, and Microsoft—are investing heavily in infrastructure to support AI’s expansion. These tech giants have projected combined capital expenditures for 2026 to reach $520 billion, with Microsoft alone expected to spend over $100 billion this year. LeCun recently left Meta after more than a decade to found AMI Labs in Paris, where he aims to develop open-source AI systems capable of understanding and modeling the physical world—not just processing language. Hanke isn’t the only high-profile figure raising concerns. Michael Burry, known for his prescient bet against the housing market in “The Big Short,” has warned that tech firms are overinvesting in microchips that could quickly become obsolete, leading to poor returns. Jeremy Grantham, GMO’s long-term strategist and a noted bubble expert, believes AI is following a familiar pattern: transformative technologies like railroads and the internet were once marked by speculative bubbles that eventually burst. On the other side, AI optimists like Elon Musk and Sam Altman argue that artificial intelligence will dramatically boost productivity and generate massive economic value, justifying the current surge in valuations. The debate between believers and skeptics continues to shape the future of the tech industry.