Benchmark general partner Bill Gurley stated that the artificial intelligence wave is genuine and has enabled many individuals to accumulate wealth rapidly, but he anticipates a 'reset' in the near future [1]. Gurley explained that when people get rich quickly, it attracts more participants seeking similar gains, which often leads to bubbles, referencing Carlota Perez's work on technological revolutions and financial capital [1]. He emphasized that bubbles only occur when the underlying technological wave is real, suggesting the current AI-driven boom fits this pattern [1].
Software stocks have been particularly affected, with Salesforce (CRM) and ServiceNow (NOW) each losing about 25% so far in 2026, and the iShares Expanded Tech-Software Sector ETF (IGV) down approximately 20% this year [1]. Gurley advised investors to have a price target ready for beaten-down software-as-a-service stocks and to consider buying them when the reset occurs [1].
Tech companies are investing at unprecedented levels, driven by massive spending on AI infrastructure and rising memory costs. AI-related expenditures for Amazon (AMZN), Meta (META), Google (GOOGL), and Microsoft (MSFT) are projected to reach about $700 billion in 2026 [1]. Gurley compared the current cash burn rates of AI companies like Anthropic and OpenAI to Uber's historical annual burn rate of $2 billion, describing the present situation as 'a scary way to run a company' [1].
While Gurley acknowledged the disruptive potential of AI across various economic sectors, he highlighted the significant financial strain on software companies and the likelihood of a market correction, urging investors to prepare for opportunities that may arise post-reset [1].
CONCLUSION
Bill Gurley’s comments signal caution for investors amid the rapid AI-driven wealth accumulation and steep declines in software stocks. With record AI spending and high cash burn rates, the market faces heightened volatility and the prospect of a significant reset. Investors are advised to be ready for potential buying opportunities as valuations adjust.