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AI is effectively ‘useless’—and it’s created a ‘fake it till you make it’ bubble that could end in disaster, veteran market watcher warns

"Fake it till you make it may work in Silicon Valley, but for the rest of us, I think once bitten twice shy may be more appropriate for AI," MacroStrategy Parternship's Ferguson told Bloomberg.

James Ferguson, founding partner of the UK-based macroeconomic research firm MacroStrategy Partnership, fears investors’ AI exuberance has created a concentrated market bubble that’s reminiscent of the dot-com era. The veteran analyst argued that hallucinations—large language models’ (LLMs) tendency to invent facts, sources, and more—may prove a more intractable problem than initially anticipated, leading AI to have far fewer viable applications. For investors, particularly those leaning into the AI enthusiasm, Ferguson warned that the excessive tech hype based on questionable promises is very similar to the period before the dot-com crash.

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