Federal Reserve Chair Jerome Powell speaks during a news conference following a meeting of the Federal Open Market Committee at the Federal Reserve on Oct. 29, 2025 in Washington, DC.
Alex Wong | Getty Images
Federal Reserve Chair Jerome Powell said on Wednesday that the artificial intelligence boom is different from the dotcom bubble of the late 1990s.
“This is different in the sense that these companies, the companies that are so highly valued, actually have earnings and stuff like that,” Powell said, during a news conference following the Fed’s two-day policy meeting.
AI investments in data centers and chips are also a major source of economic growth, he said. In the dotcom era, numerous companies raced to big valuations before going bankrupt due to hefty losses.
Powell didn’t name specific vendors, but chipmaker Nvidia has emerged as the world’s most valuable company, surpassing $5 trillion in market cap. The rally has been driven by the company’s graphics processing units, which are at the heart of AI models and workloads.
However, while Nvidia is generating big profits, high-valued startups OpenAI and Anthropic have been burning cash as they develop and expand their services.
OpenAI has racked up $1 trillion in AI deals of late, despite being set to generate only $13 billion in annual revenue. Anthropic, which is at a $7 billion revenue run rate, last week announced an estimated $50 billion cloud partnership with Google.
WATCH: AI market differs from bubble
