C3. ai CEO Tom Siebel often encounters the same inquiry about AI's future: "Is there a bubble?" In an exclusive Fortune interview at C3. ai’s New York office, he affirms, "Absolutely there's a bubble, and it's huge. " In the past two years, questions have arisen about whether AI companies, both public and private, can justify their high valuations. Siebel, a Silicon Valley veteran who began at Oracle before founding and selling his own company for $5. 8 billion, compares the current AI climate to the dot-com bubble. Despite being revolutionary, the internet didn't prevent numerous companies from collapsing. "We're witnessing a similar pattern with generative AI today, " Siebel comments. "The market is vastly overvaluing it. " Tech analysts Fortune consulted mostly concurred with Siebel, acknowledging that industry valuations were indeed inflated. "Almost every notable AI company currently experiences significant investor hype, " states Sandeep Rao, a senior researcher at Leverage Shares. C3. ai focuses on enterprise AI applications that aid companies in optimizing supply chains, predictive maintenance, and sales process tracking. It also holds valuable government contracts with entities like the U. S. Department of Defense and the U. S.

Air Force. Private sector giants such as Shell and Baker Hughes are among its major clients, with the latter's contract up for renewal soon. Recently, C3. ai announced a new partnership with Microsoft, adding another blue-chip partner to its roster. Siebel's interview with Fortune occurred before this partnership was made public. Siebel particularly criticized OpenAI, a startup closely linked to Microsoft and a leader in the AI revolution. With a $157 billion valuation after raising $6 billion in October, Siebel is unimpressed. "No one would be shocked if OpenAI vanished next Monday, " he stated. When Fortune suggested such a disappearance might surprise the industry, Siebel referenced the brief 2023 ousting of OpenAI CEO Sam Altman over Thanksgiving, saying, "Its disappearance wouldn't affect the world at all. Lives wouldn't change, nor would companies. Microsoft could find another source for Copilot. There are about ten other products that could do the job just as well. "