Talks surrounding the rapid advancement of artificial intelligence (AI) have drawn mixed reactions, with critics warning that continued progress could eventually render human labor obsolete. Despite these concerns, the sector continues to expand rapidly.

The AI market in the United States alone is estimated at $180 billion, accounting for more than half of the global AI market value.

The technology’s meteoric rise has also raised questions among investors about its long-term sustainability, fueling concerns of a potential AI bubble.

Given the Philippines’ economic ties to the US and its reliance on semiconductor exports — a core hardware component of AI — the question arises: how exposed is the Philippines to a possible AI bubble burst in the US?

In financial terms, a bubble occurs when asset prices rise far above their fundamental value, driven largely by speculation and expectations of ever-higher prices.

Such cycles are self-reinforcing but fragile, often collapsing abruptly once confidence breaks. Historical examples include the dot-com bubble of the early 2000s and the housing bubble that triggered the 2008 global financial crisis.

The AI bubble narrative largely centers on OpenAI, the developer of ChatGPT, which is reportedly valued at around $500 billion despite not yet achieving profitability.

Launched in 2022, ChatGPT reached 100 million users within two months, becoming the fastest-growing app in history and spurring competitors such as Google Gemini.

This rapid adoption has embedded AI into everyday life — while also inflating valuations across Wall Street.

In January last year, OpenAI CEO Sam Altman disclosed that the company was losing money on each $200 ChatGPT Pro subscription.

Company filings showed a 2024 net loss of roughly $1.3 billion.

One hallmark of bubble dynamics is funding growth that far outpaces revenue fundamentals.

In 2025, AI startups captured nearly 50 percent of the $405 billion in global private funding, while 58 percent of funding rounds exceeded $500 million, up from 33 percent in 2023, according to a report from Barron’s.

Firms such as Anthropic and Cohere raised massive sums at lofty valuations despite limited revenues.

A Reuters report said that some early-stage AI companies now command valuations of $400 million to $1.2 billion per employee.

If an AI bubble were to burst, the Philippines would likely experience indirect but manageable effects, similar in pattern — though far less severe — to 2008.

The country has minimal direct exposure: it hosts no AI hyperscalers, issues no AI-backed financial instruments at scale, and its banking system remains insulated from AI-related balance-sheet risks.