The concept of an "AI bubble" suggests that the AI industry is over-valued, with potentially devastating economic consequences if the bubble were to burst. However, the author argues that this assumption may not be reasonable, citing the potential for continued growth in the industry. Despite high expenses, the author believes that profits can still increase significantly, and notes that the AI industry doesn't resemble traditional bubbles. Additionally, the author points out that there is still plenty of capital available to support the industry, and that even companies without a strong competitive advantage, like Google, can still thrive, suggesting that the AI industry's valuation may be justified and have room for further growth.