The former Deputy Prime Minister Sinu Nick Clegg has warned that the current wave of price creation in the technology sector is “Crackers”, not arguing that many AI businesses are still showing profitability despite the billions pouring into machine learning.
Speaking at The Times Tech Summit, Clegg said that even the world’s leading companies – including so-called “HyperSCalers” are developing multiple models that will translate into sustainable returns.
“I think there’s a correction coming in terms of price,” he said. “These figures seem like good crackers. I don’t see any business model at the moment, even for the best AI hyperscalers, that can bring back that good business use.”
Clegg’s comments add to growing concerns from economists and regulators that the AI Boom may be fueling a bubble similar to the DotCom Era. A foreign economist recently drew parallels with the first Internet of the 2000s, which wiped $5 trillion from the markets, while the Bank of England warned against “the rate associated with AI.
Investors have poured tens of billions into the developers of the Foundation model and providers of AI infrastructure, betting on a long-term dominance in generative and Exentrise systems. But analysts warn that high computer costs, slow commercial shipments and unpredictable reproductive models are creating a tension between hype and profit.
CLEGG, who stepped down this year as Meta’s president of global operations after six years with the company, also used his appearance to cut down on British technology dependence.
“I think it’s very difficult to say anything other than this is the state of American technology,” he said. “We are completely dependent on all levels of the technology stack in a country where the interests of GeosTratec are no longer aligned in the same way.”
He warned that the lack of domestic AI infrastructure and HomeGrown capabilities is leaving a “dangerous world”, especially amid growing political tensions between the United States and Europe.
Clegg’s intervention reflects the broader volatility in Silicon Valley and global markets as AI development enters its first period of scrutiny since the 2022-23 hype cycle. While other companies – including Openai, Anthropic and Google DeepMind – continue to secure large funding rounds, investors are beginning to look for clear paths to revenue growth and operational sustainability.
Analysts expect it to be 2026 to mark a turning point in the sector, with a possible market adjustment to separate the players who work in the trade of speculative betting. In the meantime, Clegg’s warning serves as a reminder to speak quickly, the AI Gold Rush may run ahead of economic reality.
