In a recent interview, tech pioneer Bill Gates cautioned investors that the rapid surge in artificial intelligence valuations doesn’t guarantee success for all players. With an increasingly competitive landscape and stretched market expectations, many AI startups could struggle to turn hype into profitability. Gates urges a discerning view on current AI investments, highlighting the difference between transformative innovation and overvalued ventures.

In recent years, AI has become a word that can move markets faster than macroeconomic data or rates. All it takes is a mention in an earnings call or a new data center contract, and investors are able to reprice an entire sector in a matter of weeks. Yet right now comes one warning from a man who has seen the technology revolution, created it himself, and most importantly, managed to translate it into economic reality. He is none other than Microsoft founder Bill Gates.

Gates in a recent interview warned that AI is and will be an extremely…