Leading economist warns of ‘significant bubble’ in artificial intelligence

By the Editorial Team · Tuesday, October 6, 2026

Economist Professor Ha-Joon Chang warned that the rapid expansion of the AI sector resembles a bubble similar to the Dotcom Bubble, which could soon burst and cause major market disruptions. He emphasized the need for economies, including Qatar’s, to adapt by diversifying industries and preparing for shifts in labor demand as AI automates some tasks but cannot fully replace skilled human workers.

An internationally recognized economist has issued a cautionary statement regarding the rapid growth of the artificial intelligence (AI) sector, warning of a significant bubble that could burst in the near future. Professor Ha-Joon Chang, a Board Member of the Qatar Foundation and a research professor at the Department of Economics at SOAS University of London, highlighted these concerns during a recent talk at Hamad Bin Khalifa University in Qatar.

Professor Chang compared the current AI industry expansion to the Dotcom Bubble of the early 2000s, emphasizing that while the sector’s rapid growth is impressive, it carries risks of a market correction. “There is a huge bubble in the AI sector,” he said. “I don’t know when, I don’t know how serious, but it is coming.” He warned that such a burst could lead to significant disruptions, including potential closures of AI data centers and financial losses affecting many stakeholders.

In discussing the broader economic impact, Chang stressed the complexity of technological progress and its uneven effects on labor markets and industries. He noted that certain tradeable services, such as software coding and medical image analysis—fields in which some countries have developed considerable expertise—are likely to be replaced by AI in the initial wave of automation. However, he suggested that many tasks AI cannot perform well, which could sustain or renew demand for skilled human workers in these countries, emphasizing the need for economies to prepare for evolving industry dynamics.

Regarding concerns that AI could pose existential threats to humanity, Chang offered a differing perspective, placing AI’s risks within the wider context of technology’s history. He compared AI to fossil fuels and nuclear energy, both of which carry potentially damaging consequences but have also been instrumental in economic development. “Nuclear energy has the potential to destroy the world,” he remarked, questioning whether AI’s risks are truly unique or exaggerated. Chang suggested that discussions about AI’s threats might partly serve the industry’s interest in attracting attention and raising investment.

Professor Chang also addressed AI’s implications for Qatar and similar small nations, underscoring the importance of industrial diversification. He stressed that the transition will not be straightforward, as AI is unlikely to entirely replace human labor. Instead, demand might rise for workers who can manage complex tasks beyond AI’s capabilities, indicating a continuing role for skilled professionals in the global economy.

With his extensive academic background—including authorship of 17 books translated into 45 languages and sold in 46 countries—Chang combines a global outlook with a focus on sustainable structural transformation. His analysis advocates caution amid enthusiasm for AI’s potential, urging policymakers and business leaders to prepare for both opportunities and challenges ahead.

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