Tether CEO Paolo Ardoino has warned that Big Tech investment could be based on a weak economy, as concerns about an AI market bubble spread across global markets.
In a July 4 post on X, Ardoino said the AI competition has four major “flaws.” These are the gaps between cost, investment, investment time, and competition.
His warning comes as the world’s biggest technology companies pouring hundreds of billions of dollars into data centers, chips, and power. The central question for investors is whether AI can generate enough revenue to justify spending the money.
Businesses Are Paying Too Much for AI
Ardoino said that companies pay very little for an AI computer compared to the actual cost of delivery. In simple terms, some AI services may seem less expensive because companies are paying more to help them win over customers.
This makes growth appear stronger than the business model. If companies raise prices later, users can spend less. If they keep prices low, rivers can remain under pressure.
AI Benefits May Take Longer to Realize
Big Tech companies are spending a lot of money now, while the benefits from AI may take a long time to arrive. Data centers, GPUs, and electrical contracts require large amounts of upfront capital.
This creates the difference between current spending and future business returns. The bigger the gap, the more pressure companies come together to prove that AI can be a sustainable source of revenue.
AI adapts itself quickly
AI chips may become obsolete within 3 to 5 years. However, loans and investments used to support AI infrastructure often have long payback periods.
This is important because companies may need to replace expensive equipment before it pays for itself. If demand slows or prices fall, the economy becomes more difficult to protect.
Companies Face Intense Competition
Open source AI models are advancing rapidly and may weaken the pricing power of AI suppliers. If low-cost or free options are good enough, customers may refuse to pay high prices.
This can make it difficult for companies to recoup their investment in infrastructure. It could also reduce the funding expectations that have fueled AI’s massive valuation.
Ardoino’s warning is part of a larger debate that is taking place in the markets.
Chinese hedge funds including Wealspring Asset and Shanghai Banxia Investment Management Center have warned that AI stocks may be in a recession. Wealspring is said to have called AI stocks around the world a “super bubble”, while Banxia said the trigger for a correction could already be seen.
His concern is simple. AI has become a major driver of the retail market, especially for large tech companies. If investors start to question the return on investment in AI, the effects could spread beyond the tech sector.
Using AI Could Hit Millions
JPMorgan has made that global AI-related spending could reach $5.5 trillion by 2030. At the same time, LettersAmazon, Meta, and Microsoft are expected to spend $720 billion this year.
This high level of investment allows AI to play a major role in business income, energy demand, chip demand, and credit markets.
The Bank of England warned in October 2025 that AI-related valuations were approaching the levels seen during the dot-com bubble. It said AI infrastructure would require billions of dollars, with a significant portion financed by debt.
Some investors have a slightly negative view. He says today’s AI market differs from the dot-com era because the big companies that funded the boom already have strong profits and stable businesses.
Morgan Stanley has also estimated that nearly $3 trillion in AI investments could flow into the economy by 2028.
However, Ardoino’s point is that the risk lies within the AI economy itself. If pricing, profitability, hardware longevity, and competition are not aligned, the market may be so limited that it will be difficult to turn AI demand into long-term returns.
A note Tether CEO Warns of Four Cracks in Big Tech’s AI Boom appeared for the first time BeInCrypto.
