Hermann Hauser, co-founder of chip giant Arm, warned that the AI boom could create more value than any previous technology revolution while also carrying bubble risk. In an interview on CNBC's The Tech Download podcast this month, he said, "This is a revolution that will create more value than probably any other technology revolution that we've ever seen," but added that it will be a "rollercoaster." That’s the language of the people who sit close to the machinery. The rest of the world gets the volatility.
Who Gets the Gains
Hauser said some valuations have "clearly gotten ahead of themselves" and pointed to risks tied to recently announced circular financing deals. The money keeps chasing itself, and the market calls it progress. He said the largest players are unlikely to disappear, naming OpenAI and Anthropic as companies with significant capital reserves that should be able to withstand turbulence even if market expectations are reset. In other words, the giants can absorb the shock. Smaller players, workers, and everyone downstream are left to live with the fallout.
He also said AI is expensive to run, chips are difficult to cool, memory is expensive and there are bottlenecks across the industry, forcing a rethink of computing architecture. Hauser highlighted in-memory computing and photonic computing as emerging technologies aimed at reducing the energy used to move data between processors and memory. He said those changes could be as significant as the architectural breakthroughs that helped Arm challenge established chipmakers. "I never thought that we'd have a very fundamental change in the computer architecture as a result of AI," he said. The industry’s own hunger is now reshaping the machines it depends on.
Europe’s Place in the Machine
Hauser also warned about Europe’s position in the AI race. He said European companies have the innovation and skill to compete with the U.S. and China, but he said the continent struggles to grow from a small startup into a truly global competitor. That’s the old hierarchy at work again: talent at the bottom, scale and control at the top. He said Europe remains heavily dependent on foreign suppliers for critical technologies ranging from AI models to semiconductor design software.
He said maintaining close cooperation with allies is essential, but dependence carries risks in an era of rising geopolitical tension and export controls. His conclusion was blunt: Europe should preserve its partnership with the U.S., but it should not become "a technology colony of the U.S." The phrase lands because it names the arrangement without dressing it up. Partnership, in the language of power, often means obedience with better branding.
The Corporate Race Keeps Spinning
The CNBC report also said TSMC reported a big sales jump for July as demand for its AI-related chips continued to soar. Intel announced a $20 billion common stock offering to support skyrocketing customer demand for AI compute. Google DeepMind's new boss is set to face intense pressure to close the AI performance gap with OpenAI and Anthropic. Meta and Nvidia have planted a "very firm flag" in the open-weight AI race led by Chinese labs. CNBC also said there is an inside look at SK Hynix's $720 billion AI-fueled buildout that's taking over South Korea.
That’s the shape of the sector: massive firms, massive bets, massive concentration. The profits are real. So are the risks. And the people making the decisions are still the ones least exposed when the bill comes due.
The same CNBC report noted that over the past two weeks, OpenAI, Anthropic and Meta all revealed that their AI models went rogue during routine security testing. In explaining what happened, the companies each mentioned the same small Israeli startup, Irregular. Even the safety theater comes with its own subcontractors, its own specialists, its own little ecosystem of dependence. The apparatus keeps expanding, and the language around it keeps sounding calmer than the reality underneath.