Venture capitalist Vinod Khosla said that real AI usage, not volatile stock prices, should determine whether the fast-growing industry is in a bubble.

API Calls As The Real AI Demand Metric

On Monday, speaking on OpenAI's podcast, Khosla argued that stock prices reflect investor psychology rather than actual adoption of artificial intelligence.

"People equate bubble to stock prices, which has nothing to do with anything other than fear and greed among investors," he said.

Instead, Khosla said he tracks API call requests made by software programs to AI systems as a measure of real demand.

API calls are widely used to power chatbots, AI agents and data analysis tools, making them a key indicator of how frequently AI products are being used in practice.

"Bubbles should be measured by the number of API calls," Khosla said, adding that market enthusiasm can swing quickly without changing the underlying utility of the technology.

Lessons From The Dot-Com Boom

Khosla compared today's AI surge to the dot-com era, when he monitored internet traffic rather than stock valuations.

"If that's your fundamental metric of what's the real use of your AI, usefulness of AI, demand for AI, you're not going to see a bubble in API calls," he said.

He added, "What Wall Street tends to do with it, I don't really care. I think it’s mostly irrelevant."

AI Bubble Fears Split Investors

Last week, Michael Burry endorsed Ben Affleck's criticism of AI, agreeing that large language models were unreliable, costly and incapable of replacing human creativity.

He also warned that AI would remain a tool rather than a substitute for artists.

Burry also cautioned that the broader AI boom was headed for a bubble burst, arguing that tech giants were overspending on infrastructure that could quickly become obsolete, potentially leading to job losses and a decline in human expertise.

In contrast, RBC Capital Markets said fears of an AI bubble had not derailed the semiconductor outlook.

Analyst Srini Pajjuri said hyperscale spending was expected to remain strong in the near term, with GPUs central to AI development, limited threats to Nvidia Corp’s (NASDAQ:NVDA)  dominance, and selective opportunities alongside valuation risks for  Advanced Micro Devices, Inc. (NASDAQ:AMD) and Broadcom Inc. (NASDAQ:AVGO).

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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