India’s Chief Economic Advisor V Anantha Nageswaran has added his voice to concerns over artificial intelligence-linked stocks, describing current valuations as a bubble and suggesting the surrounding narrative has grown overstated. Speaking at an event, he stated there was no doubt that AI-related share prices and valuations have entered bubble territory, fueled by overly optimistic views on productivity gains and changes to work. The comments arrive as investors have directed hundreds of billions of dollars into AI-linked companies, lifting firms such as Nvidia and other chip and infrastructure providers to record levels. The surge has been supported by expectations that the technology will sharply raise productivity and cut labour needs. Nageswaran said much of the excitement stems from a narrative that may not match reality, with optimistic projections assuming profits will flow mainly to capital owners rather than workers. He noted that AI will affect certain job categories and skills but cautioned against assuming it will cause broad employment disruption, adding that the overall discussion remains exaggerated and the extent of any impact is still uncertain. His remarks align with recent warnings from Jefferies strategist Christopher Wood, who highlighted rising risks of a near-term correction in AI stocks due to crowded investor positions, especially in semiconductor holdings across Asia-focused funds. Wood also pointed to potential liquidity pressures from large upcoming public offerings. Despite ongoing heavy spending on AI infrastructure by major technology firms, both Nageswaran and Wood question whether current valuations fully account for uncertainties around future returns. The debate continues over whether the rally mirrors past episodes of market excess, even as leading AI companies show stronger profitability than many dot-com era firms.
