Former Meta executive Nick Clegg just delivered a reality check that's got Silicon Valley talking. The ex-British deputy PM turned tech policy guru warned that the chance of an AI market correction is "pretty high," citing "unbelievable, crazy valuations" across the sector. His timing couldn't be more pointed - as hyperscalers pour hundreds of billions into AI infrastructure with unclear returns.
The warning shot came from an unlikely source. Nick Clegg, who spent years navigating Meta's most challenging policy decisions before stepping down earlier this year, didn't mince words during a CNBC interview. "There's just absolute spasm of almost daily, hourly, deal making," he told viewers, describing an industry drunk on its own potential.
The former British deputy prime minister knows something about bubbles. He watched Meta emerge stronger from the dot-com crash, along with Amazon and Google. But this time feels different. "You've got to think, wow, this could be headed for a correction," Clegg said, putting the odds at "pretty high."
What's driving his concern isn't just frothy valuations - it's the fundamental math. Hyperscalers are "pouring hundreds of billions of dollars into the ground and building these data centers," as Clegg puts it. The question that keeps industry insiders awake: can they actually recoup these massive infrastructure bets? The sustainability of current business models remains unproven, even as companies race to build ever-larger AI capabilities.
Clegg's skepticism extends beyond balance sheets to the technology itself. He's pushing back hard against the superintelligence narrative that's captured Silicon Valley's imagination. While Meta CEO Mark Zuckerberg created an AI lab earlier this year to pursue artificial superintelligence, and SoftBank's Masayoshi Son has backed the concept, Clegg sees limits to current AI approaches.
"I think there are certain limits to that probabilistic AI technology, which means that it won't perhaps be quite as all singing and all dancing as people suggest," he explained. It's a direct challenge to the "holy grail" mentality driving current investments - the belief that AI will soon surpass human intelligence across all domains.
The reality check comes as other tech leaders voice similar concerns. founder Jeff Bezos recently described the current moment as an "industrial bubble," though he maintains that "AI is real, and it is going to change every industry." The distinction matters: bubbles can burst while the underlying technology continues advancing.
