Treating artificial intelligence investment in isolation and concluding that the sector is in a bubble reflects a shortsighted view of AI’s long-term economic role, Zhang Hongjiang, a venture partner at Source Code Capital and an international member of the U.S. National Academy of Engineering (NAE), said on Tuesday.
Zhang shared his reflections in a conversation with Jany Hejuan Zhao, the founder and CEO of NextFin.AI and the publisher of Barron's China, during the 2025 T-EDGE conference, which kicked off on Monday, December 8, and runs through December 21. The annual event brings togehter top scientists, entrepreneurs and investors to discuss pressing issues of the AI era.
Zhang said that as reasoning models and AI agent capabilities continue to advance, the industry is likely to see major breakthroughs within the next 12 to 24 months. In his view, assessments that focus narrowly on current spending in areas such as computing power, chips and data centres fail to capture AI’s broader economic potential.
“If you believe that AI will account for a significant share of future GDP and become a core pillar driving economic growth, then looking at investments in compute, semiconductors and IDC infrastructure in isolation and calling AI a bubble is, to some extent, shortsighted,” Zhang said.
He added, however, that bubbles do exist in certain segments of China’s technology industry. Zhang singled out robotics as the area with the most pronounced speculative excess, arguing that without a fundamental breakthrough in world models, embodied intelligence is unlikely to achieve true general-purpose capabilities.
“The path to general-purpose robots will be very long,” Zhang said. “It is not a three-to-five-year journey, but more likely five to ten years.”
On the question of whether AI will replace human labour, Zhang offered a more cautious assessment than in previous technology cycles. Historically, he said, technological revolutions displaced some jobs but ultimately created more opportunities elsewhere, leading to net employment growth.
“The emergence of superintelligence is different,” Zhang said. “The jobs eliminated by AI will not necessarily be replaced by new jobs created in other areas, which means overall employment opportunities could decline.”
