OpenAI Chair Bret Taylor AI Bubble Warning: Why a 2026 Correction is Coming

The man overseeing OpenAI’s board just admitted the AI boom is "probably" a bubble. Bret Taylor, chairman of OpenAI and co-founder of Sierra, expects a market-wide correction and consolidation to shake out the tech landscape over the next few years.

Bret Taylor AI Bubble Prediction and Future Value

Speaking at the World Economic Forum in Davos, Switzerland, Taylor noted that both "smart money" and "dumb money" are currently funding competitors at every layer of the tech stack. According to CNBC, he believes that while money is plentiful because of AI's projected economic impact, the free market will eventually determine which players have the best products and sustainable value.

Despite the bubble warning, Taylor remains an "AI optimist." He argued that innovation can't happen without "messy competition," and that the coming correction is a necessary phase for the industry to mature. He suggested that the market is only at the beginning of the adoption curve, with major impacts on commerce and search yet to fully materialize.

Sierra's Growth and the Real-World Timeline

Taylor's own startup, Sierra, which builds AI agents for customer service, recently raised $350 million in September, boosting its valuation to $10 billion. Even with such high-flying numbers, he warned that it takes time for corporations to adopt new technologies, for regulations to evolve, and for the necessary infrastructure to be completed.