Although economists suggest current AI spending outweighs AI-related profits, pragmatic channel partners who stay the course can still thrive.
Artificial intelligence has sparked one of the biggest spending waves in tech history. Venture capitalists have poured nearly $200 billion into AI this year, while data-center investment has tripled since 2022 — levels not seen since the dot-com era.
Economists Jared Bernstein and Ryan Cummings warn that valuations may be outpacing realistic profits and fueling what they call the “AI bubble.” Yet whether that bubble pops next quarter or five years from now, partners shouldn’t panic.
“We’re in the midst of an AI bubble, though how big it is and how quickly it pops is hard to say,” longtime channel analyst Rich Freeman of Channelholic told Channel Dive. “The key is not to make fear-based decisions.”
Hype vs. reality
Partners who accept the presence of a looming bubble can better navigate AI’s inevitable ebbs and flows.
Vendors — from cloud hyperscalers to AI chipmakers — are racing to build compute capacity and embed generative AI into every product they sell. But enterprise adoption is moving far more slowly than the capital flows.
Bernstein and Cummings note that AI investment now consumes about one-third more of the U.S. economy than internet investment did at the height of the 1990s boom. Still, today’s debt appears more contained. Borrowers, such as CoreWeave, are paying around 9% interest, which is well above Treasury rates.
Even so, experts warn that assuming AI’s exponential growth will continue unchecked is a mistake. “The thought was that this growth would be exponential,” technology critic Alex Hanna told the Los Angeles Times. “We’re hitting a wall.”
Risk and rewards
Fallout from an AI market correction would mostly impact vendors.
Freeman cautioned MSPs to watch for vendors “over-investing in AI capabilities to an unsustainable degree.” Channel partners rarely have visibility into vendor balance sheets, but spotting signs of overextension is possible. A big tip-off? When companies are dramatically expanding AI-related capital expenditures but slowing investment in existing product lines.
Two other signals of risk emerge in the form of a sudden pivot to AI branding without corresponding customer success stories, or repeated debt refinancing tied to data center expansion, according to a variety of industry observers. Partners dependent on such suppliers might want to hedge by establishing secondary vendor relationships before cost-cutting hits product support or partner programs.
Freeman’s first rule for channel partners is simple: in an environment where enterprise budgets are tightening, every AI proposal must tie directly to measurable returns.
For example, show customers actual use cases, such as automated ticket handling, document summarization or risk scoring. These types of efforts often deliver the fastest proof of value, Freeman said. With each deployment, include 30- or 60-day milestones and clear off-ramps, Freeman said.
“Make sure anything you propose to clients is closely tied to a relatively clear, near-term ROI argument,” he said. Such discipline not only protects client trust but also ensures partners can sustain margins if AI enthusiasm cools further.
If an AI correction triggers a broader economic slowdown, partners will need the same strategies that carry businesses through recessions. Tactics include keeping the books tight, managing cash flow conservatively and avoiding over-leveraging. Freeman also recommends maintaining healthy reserves and not putting large bets on unproven AI tools. Shifting service mixes toward recurring, outcome-based contracts — such as ongoing data governance or AI-readiness audits — can stabilize revenue if clients delay bigger projects.
Build for the long game
If the AI bubble does burst, the underlying technology will remain, and it will not lose relevance.
“Think back to the dot-com bubble,” Freeman said. “Almost all of the predictions that created it eventually came true. It just took a lot longer than anyone expected.”
Partners who abandon AI if the bubble bursts will miss the long-term payoff when adoption resumes. However, those who build foundational competencies such as data quality, security compliance, and cost management — even in a business environment of over-investment and speculation — have the greatest chance of creating sustainable AI practices, Freeman said.
“The thing I would advise [partners] not to do, though, is walk away from AI,” he said. “We're probably in a bubble, it will probably burst, and there will probably be some painful repercussions, but over the long term, AI will be a massive producer of tech industry growth, and channel partners who are not part of that longer term trend because they bailed out now will regret it.”
