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The Coming AI Reality Check: Former Meta Executive Nick Clegg Warns of Market Correction



Man in suit with a slight smile in front of a modern glass building displaying the "Meta" logo, suggesting a professional setting.

The artificial intelligence boom may soon face a dose of reality. Nick Clegg, former President of Global Affairs at Meta Platforms and the UK’s former Deputy Prime Minister, has warned that the chance of a correction in the AI market is “pretty high.”

In an October 2025 interview on CNBC’s Squawk Box Europe, Clegg said the sector’s explosive momentum has produced “unbelievable, crazy valuations” and a “spasm of almost daily, hourly deal-making” — signals that, he believes, could precede a cooling period rather than a permanent bust (Business Insider, 2025).


Between Innovation and Inflation

Clegg’s caution isn’t about the technology itself — he was quick to clarify that AI will persist and flourish. But he argued that today’s euphoria far exceeds near-term fundamentals. The capital intensity required to build and train frontier models — from chips to power-hungry data centers — means profitability still lags behind investor enthusiasm.

“It doesn’t mean the technology itself is not going to persist… but the chance of a market correction is pretty high,” 

— Nick Clegg, CNBC interview, October 2025


Two men in conversation, one in a green pinstripe suit, the other in a black suit, gesturing. Elegant room with vases and lit wall lamps.


The former Meta executive described the current landscape as one marked by hype cycles, with startups and incumbents alike rushing into partnerships and licensing deals before sustainable business models emerge.


Echoes from History

Clegg’s remarks come as economists and industry leaders draw parallels between today’s AI frenzy and past tech bubbles.

Jamie Dimon, CEO of JPMorgan Chase, told Fortune that while he doesn’t view AI as a full-blown bubble, “some projects may fail.” He urged investors to distinguish between long-term utility and short-term speculation (Business Insider, 2025).

Meanwhile, Eric Schmidt, former Google CEO, said the AI surge is laying “the foundation of a new industrial era,” though he acknowledged that investor behavior shows echoes of previous tech-bubble patterns (Business Insider, 2025).

At the policy level, IMF Chief Economist Pierre-Olivier Gourinchas added that while AI investment may experience a “boom-and-bust” phase, it is unlikely to threaten global financial stability because most funding remains equity-backed rather than debt-driven (Reuters, 2025).


What a Correction Could Mean

A market correction, experts say, wouldn’t spell the end of the AI era, only a reset toward fundamentals. Valuations may normalize as investors demand clearer paths to profit. Venture capital could consolidate around firms with real-world traction in productivity, cybersecurity, and automation. Infrastructure spending on GPUs and cloud capacity will likely face stricter board oversight focused on measurable ROI.

In short, the winners will be those who treat AI as an enduring capability, not a speculative bet.


A Moment for Maturity

Clegg’s message isn’t anti-AI — it’s a reminder that every technological revolution faces a moment of reckoning. What distinguishes enduring innovations from bubbles is the shift from excitement to execution.

“The sector will persist and flourish,” Clegg said, “but we need to keep our feet on the ground.”

For business leaders, the coming year may mark the point to move beyond experimentation toward disciplined value creation — to prove, as Clegg implies, that AI can survive gravity.



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