Nvidia’s (NVDA) boosters have long claimed that the AI revolution is just getting started. However, there is a growing concern in Big Tech about the vast amounts of money being poured into AI, especially when the expected returns aren’t materializing for companies that aren’t Nvidia. Some industry insiders have even noticed jealousy brewing among employees of other Big Tech firms, as Nvidia’s employees—nicknamed “Nvidians”—seem to be riding a wave of success that others are missing out on.

Questions Arise During Nvidia’s Earnings Call

This tension was clear during Nvidia’s recent earnings call. Several analysts pressed CEO Jensen Huang about where all the AI investment is going and how Nvidia views the massive capital expenditures in the industry. For Nvidia and a few other hardware companies, these investments are already paying off. But for the rest of Big Tech, the returns are far less apparent.

The AI Hype Debate

There’s a growing debate: is the AI hype nearing its end, or is it just beginning another phase? The answer seems to depend on how long-term your perspective is. For investors, the challenge is whether they can adjust to a shift from the exponential gains promised by AI to a more modest, steady growth.

Nvidia’s Earnings Miss Gives Concerns

Despite beating expectations, Nvidia didn’t deliver the same explosive results that it had in previous quarters. This has led some to question whether the appetite for AI investments is waning. However, while the AI market may no longer be as frenzied as it once was, the latest scrutiny on AI spending seems more like a minor adjustment than a major shift in direction.

OpenAI’s Skyrocketing Valuation

Consider OpenAI’s latest reported valuation, which was announced on the same day that Huang was fielding tough questions about returns on investment. The Wall Street Journal reported that OpenAI, the company behind ChatGPT, is in fundraising talks that could value it at over $100 billion—a valuation comparable to giants like Starbucks and BP. This suggests that there is still plenty of excitement surrounding AI, even if some skeptics doubt whether financial enthusiasm is the best indicator of AI’s long-term viability.

Big Tech’s Continued AI Investment

Despite concerns about ballooning costs and uncertain revenue streams, Big Tech’s CEOs are continuing to invest heavily in AI. This is a key reason for Nvidia’s remarkable 122% revenue growth. However, it also highlights a mismatch between the demand for AI chips, which Nvidia supplies, and the promise of revolutionary software that hasn’t yet fully delivered.

Weighing the Risk of Investor Backlash

As demand for Nvidia’s hardware continues to rise, tech companies are increasingly tying their futures—and their spending—to AI. But at some point, investors might demand more tangible returns, leading to a potential pullback that could hurt Nvidia. For now, though, Big Tech leaders have invested so much in AI that it’s hard to imagine what could convince them to scale back. When you’re at the top of the organizational chart, the idea of sunk costs can sometimes be overlooked, and what some might see as chasing losses can be mistaken for determination.

The Future for AI Investments

Now that all the major AI players have reported their earnings, the big question is whether the uneven results across the tech world represent a buying opportunity or a signal to take a more critical look at AI’s true value. Until the pace of investments slows, it will be difficult to know for sure.