Citi’s Rob Rowe AI Bubble Rejection

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AI Investment: A Measured Pace,But Solid Foundations,Says Citi‘s Rob Rowe

New⁢ York,NY – August 19,2025 – Despite concerns about a potential “bubble,” artificial intelligence (AI) investment is on solid⁣ footing,according too Rob Rowe,Citi Research head of global strategy. Speaking with CNBC on Monday,⁤ Rowe drew parallels to the early days of the internet,⁢ suggesting that while AI adoption may not explode overnight, the underlying fundamentals are strong.

“Not as much” is Rowe’s response to comparisons with the ⁢dot-com bubble of the late 90s. Unlike that era, he⁢ explained, today’s AI companies are largely profitable, generating strong cash flow and funding their growth thru internal resources rather than relying on debt.

This assessment comes as UBS strategists cautioned ⁣investors to ⁣be mindful of overheating in ⁤the AI sector, noting the increasing demand for capital to fuel the construction of data centers and AI infrastructure.the demand is being driven by companies eager to capitalize on the potential ⁤of AI, but Rowe believes the current situation is fundamentally⁤ different from the speculative frenzy of⁤ the late 90s.

“You’re talking about companies that have very solid earnings, very ⁤strong cash flow, and they’re funding a lot of this growth through that cash flow,” Rowe‍ stated.

The industry is currently shifting from a focus on building AI – the training phase – to using it – the inference or reasoning phase. This transition suggests a move towards practical⁤ submission and tangible returns on investment.

Citi, like many financial institutions, ⁣is actively integrating AI into its operations, aiming for modernization and improved client experiences. This push is⁢ also driven by compliance requirements, as evidenced by recent scrutiny of data ⁢systems within the financial sector.

While acknowledging the potential for risks, Rowe’s perspective offers a more grounded outlook on the AI landscape, suggesting that while growth might potentially be measured, the foundations are built to last.