Veteran investor Jeremy Grantham warns that artificial intelligence has entered bubble territory, echoing his past calls on Japanese equities and dot-com stocks. Speaking on the Merryn Talks Money podcast, the GMO co-founder argues speculative fervor around AI companies mirrors classic bubble dynamics.

Grantham built his reputation predicting major market crashes, including the 2000 tech crash and 2008 housing collapse. His bearish stance on AI reflects concern over inflated valuations and unsustainable investor enthusiasm. Many AI-focused stocks have surged despite limited profitability or clear revenue paths.

The warning comes as AI-related investments attract unprecedented capital flows. Grantham suggests the current cycle could end similarly to previous bubbles, with sharp corrections following excessive speculation. Investors should prepare for potential downside in overvalued AI sectors.