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Fears of an AI bubble permeate the industry amid San Francisco’s Dreamforce conference

Courtesy KPIX
Courtesy KPIX

By CBS Bay Area

The signs to dream are hard to miss. But so are the caution signs.

As thousands flock to downtown San Francisco for Dreamforce 2025, the future of the AI industry and its impact on this city is coming into sharper focus.

On Monday, Salesforce CEO Marc Benioff announced a massive five-year plan: $15 billion to make the Bay Area “the AI capital of the world.”

But with all that momentum comes a big red flag from respected financial journalist Andrew Ross Sorkin, who warns that today’s stock markets echo those of 1929, when highs preceded a collapse into the Great Depression.

“I would argue that the economy is being propped up, almost artificially, by the artificial intelligence boom,” Sorkin said.

In a recent 60 Minutes interview, he explained to correspondent Lesley Stahl that the billions being invested in AI will eventually need billions more in profit to justify skyrocketing stock prices.

“This is either a gold rush or a sugar rush,” Sorkin said.

University of California, Berkeley professor and AI expert Olaf Groth worries it’s leaning toward the latter, and says the next year could make or break the industry and its investments in San Francisco.

“It’s a matter of whether or not we can provide business around those technologies that are profitable and yield a return on investment,” Groth explained.

But not everyone is sounding the alarm. San Jose State University professor Ahmed Banafa believes AI’s backing right here in the Bay Area gives it strength.

“All of this fear because we have seen bad things in the past,” Banafa said. “If there is a crack, we are talking about Microsoft, we are talking about Google … they have cash. They are not companies that can collapse tomorrow.”

For now, this week is all about dreaming big and investing even bigger. But for those looking ahead, the next 12 to 24 months are crucial.

Boom or bust, San Francisco will be at the heart of it all.

“We are the epicenter,” said Groth. “Make no mistake about it. Our current economy is fundamentally built around the promise of AI.”

Article Topic Follows: Syndicated Local

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