Jamie Dimon warned this week that markets may be showing “too much exuberance,” pointing to frothy valuations around artificial intelligence and the Big Tech giants building the infrastructure behind it. The JPMorgan Chase chief made the comment in a TV interview, a warning that landed with the weight of a line from one of Wall Street’s most famous cautionary speeches.
The wording immediately recalled Alan Greenspan’s “irrational exuberance” warning from December 1996, delivered in a speech at the American Enterprise Institute. Greenspan asked then, “How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions?” He also said that “we as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability.” Markets around the world sold off on the remark, but U.S. stocks, especially tech names, kept rising for years before the dot-com bust.
The comparison matters because the current surge in artificial intelligence has become one of the central debates on Wall Street. Dimon’s warning comes after a week in which Panmure Liberum strategist Joachim Klement said there were increasing signs of “irrational exuberance” in the AI boom, adding that “AI is in a bubble” even if it can last another one to two years. That team also calculated that the current AI boom is about 60% larger than the late-1990s TMT episode when measured by the contribution of tech capex to U.S. GDP growth, and estimated that almost all of U.S. real GDP growth right now is being driven by technology investment.
Greenspan was not predicting a bubble when he spoke in 1996, and he kept monetary policy loose even as a massive one formed around the dawning internet age. The phrase later became shorthand for late-stage bubble psychology after the dot-com bust finally arrived years later. That history is what gives Dimon’s warning its force: the market can spend years ignoring the caution, but the bill can still come due fast once the story changes.
