The artificial intelligence (AI) market may be heading towards the “explosion of a big bubble”, according to assessments made by Yann LeCun in an interview with CNBC.
The sector pioneer and creator of AMI Labs took the opportunity to disqualify Elon Musk’s project involving the topic, classifying xAI, the AI company owned by the richest man in the world, as a “failure” unable to rival the main names in the segment.
This comment only further inflames an old fight between the two executives, casting doubt on the financial flow invested in these technology companies, according to CNBC.
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The scientist had already criticized Musk’s stances on the internet before, and the Tesla owner responded by saying that the researcher was stuck in time and no longer understands anything about AI.
For LeCun, the fact that Musk’s startup is losing its main brains justifies all this distrust. “xAI is kind of a failure, frankly, because the founding team left,” he told CNBC.
In his view, the previous episodes undermined Musk’s reputation in the sector, adding that “Elon is now in a position where it is very, very difficult for him to recruit top talent in AI, because he kind of didn’t behave in very good ways with the previous team”.
CNBC recalls that there were profound corporate changes at xAI last year, in addition to being incorporated into SpaceX in a deal that valued the technological arm at US$1.27 trillion.
Still, financial statements show that the aerospace company’s artificial intelligence division operated at a loss of $2.5 billion in the first quarter of 2026, forcing Musk to market the potential of his server complexes in Tennessee to competitors such as Anthropic and Google.
According to LeCun’s statement to CNBC, the startup has a “huge infrastructure” that can be rented “because that is the only way it can [Musk] recover costs.”
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The researcher summarized his discontent by saying that he does not feel optimistic about the future of xAI, and that for him, cutting-edge laboratories are at risk of collapse due to the mismatch between investment and financial return.
“The prices of these AI services are rising, and the cost of running them is falling, but not at the speed needed,” he told CNBC. “So all these companies are losing money, and basically the use for most people is funded by investors. This can’t last long, right?”
To avoid widespread failure, the founder of AMI Labs stated that large AI companies “will have to raise prices, cut costs or there will be a big bubble burst”.
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This positioning reflects behind-the-scenes concerns within the sector itself, according to CNBC. In a recent statement, Sam Altman, CEO of OpenAI, admitted that current operational expenses have become a huge obstacle for business.
LeCun points out that the solution to this scenario of economic unsustainability would be to abandon dependence on large language models (LLMs), efficient only for codes and mathematics, in favor of so-called “world models”.
As the market tries to design complex autonomous systems with current technology, the scientist told CNBC that “the cost to run these systems with this type of performance is very high compared to the amount of money that users are willing to pay.”
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He further concludes by saying that personally, he does not believe that there will be reliable and generalist AI agent systems until they are based on world models.
