AI Bubble: Market overbought on borrowed money, warns CEO

The stock market is currently in a state of euphoria, especially concerning everything related to artificial intelligence and microchips. But not everyone sees it so brightly. Bob Elliott, CEO of Unlimited Funds, has sounded the alarm: the current situation strongly resembles "classic bubble-type activity."

According to Elliott, the unbridled enthusiasm for AI and chips is pushing investors to buy without much logic. It's the classic FOMO (Fear Of Missing Out) syndrome, the fear of being left out of the next million-dollar deal. On August 6, 2026, Bob Elliott, CEO and CIO at Unlimited Funds, told Bloomberg that he sees signs of a bubble in the AI and chip market. This type of behavior, he says, has all the hallmarks of excessive speculation.

It's not just the euphoria that worries the expert. Elliott has noted a concerning increase in "leverage" across markets. Essentially, a lot of borrowed money is being used to invest, hoping to multiply gains. But if things go south, losses multiply too, and this can cause everything to crash much faster. Elliott highlighted that excessive financial leverage, meaning money borrowed for investments, is inflating asset values.

When markets are full of debt and driven by blind enthusiasm, they become more fragile. A small jolt can turn into an avalanche, with consequences for everyone, even those not playing the stock market. A market inflated by debt, as warned by Elliott, increases the risk of sharp corrections that can impact the general economy. So, AI is the future, but maybe it's best not to mortgage your house to buy shares in any company that puts "AI" in its name.