Is AI Bubble Waiting To Burst? Nikhil Kamath Warns Of Tougher Months Ahead

The artificial intelligence (AI) industry could face tougher months ahead as the money being invested in AI is much higher than the money it is generating, Investor and entrepreneur Nikhil Kamath said.

Speaking at the NDTV World Summit 2026, Kamath said nearly $1 trillion goes into AI every year, while revenue from enterprise use of AI is estimated at $100 billion to $200 billion.

"The money going into AI and the money going out of AI, there is a big gap in between that," he said. Kamath estimated that the gap could be around $700 billion to $800 billion every year. 

He pointed out that a lot of money from the Middle East and foreign investors has already gone into AI investments in the US. However, he questioned whether the industry would be able to attract the same amount of fresh capital every year.

"To find that new capital every year, and this is significant, right? This is like a trillion dollars of fresh money, is tough," he said.

He explained that the world economy is worth around $100 trillion to $120 trillion, with services making up about half or 60% of it. If AI disrupts 10% of this sector, it could generate $6 trillion to $7 trillion in productivity gains.

However, Kamath said he has not yet seen these expected gains on the ground. "I don't know if I've seen that happen on the ground yet," he said.

Kamath also raised concerns about the cost of money in the coming year. He said US Treasury rates could rise to 5%, 6% or even 7%. This will make it harder for the AI industry to find the money it needs.

He said the industry would need someone to bridge the gap between its current spending and the expected revenue from AI, which could reach trillions of dollars if the projections become reality.

Kamath added that raising money could become more difficult in the coming year than it has been this year or last year. He also said that those who can raise a large amount of capital now and hold on to it could be in a better position.

"So, if somebody is able to raise a lot of capital today and keep it, probably not a bad idea," he said.