❓WHAT HAPPENED: Former Facebook executive Julie Zhuo criticized the lack of data-driven decision-making among artificial intelligence (AI) startups, highlighting concerns over their explosive growth and sustainability. Her concerns echo market analysts who warn that the AI industry could be forming an economic bubble.
👤WHO WAS INVOLVED: Julie Zhuo, former Facebook vice president of design and technology investor, and podcast host Lenny Rachitsky.
📍WHEN & WHERE: Remarks made during a recent podcast interview.
💬KEY QUOTE: “I don’t think a lot of the fast-growing companies are using data well at this point… things just don’t grow that fast.” – Julie Zhuo
🎯IMPACT: Concerns grow over the sustainability of AI startups, with warnings about potential failures if venture capital dries up.
Former Facebook executive Julie Zhou is warning that much of the artificial intelligence (AI) technology industry’s growth is not being driven by robust data-driven business strategies, but rather by “good instincts and good vibes.” Speaking with technology industry podcaster Lenny Rachitsky, Zhou argued that while the AI industry has tremendous promise, the technology is still far from achieving what many adherents claim. This has left the AI technology sector rife with speculative investment on a scale that could potentially threaten the U.S. economy should the bubble burst.
“I don’t think a lot of the fast-growing companies are using data well at this point. And, the main reason why is because, traditionally, things just don’t grow that fast,” Zhou contended. The former vice president of product design at Facebook turned tech industry investor continued: “Today we see companies that are growing insane, and they’re still about ten people, or two people, or however many people, but they’ve got hundreds of millions [in revenue], and hundreds of millions of users, and they don’t actually have all of that infrastructure… to be able to do that data analysis.”
“In my mind, [data] helps us reflect back on what is reality… what always happens is eventually, things stop growing. Growth does not happen forever. And usually when growth stops, everyone has this question like, ‘what’s going on, what happened?'” Zhou warned, echoing similar caution from economic analysts who observe that some AI companies are already seeing slowing growth. Notably, many of these companies are backed by hundreds of millions of dollars of venture capital and banking industry investment, potentially leaving investors overleveraged on an AI industry bubble.
Over 33 US-based AI startups raised $100 million or more in 2025 alone, though none have yet to turn a profit or demonstrate market viability. Many of these start-ups, along with more established companies, are reliant on technology from industry leaders like Nvidia—with the former making up nearly 10 percent of the S&P 500. Should a possible AI bubble burst, the impact could have serious consequences for U.S. markets.
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