The AI industry’s snowballing image problem is a PR crisis in motion
- Sam Schofield
- 2 minutes ago
- 3 min read
After years of relentless hype, the AI industry is facing a growing image problem. Sentiment is shifting, albeit slowly at first, like a snowball gathering weight, and the timing couldn’t be worse. Just as the sector needs to project confidence and stability, cracks are appearing: in share prices and investor confidence as well as the way its leaders are communicating.
Nvidia’s odd infrastructure investment defence
Take Jensen Huang, CEO of Nvidia, who recently defended the industry’s hundreds of billions in investment by claiming AI is the first technology that requires “infrastructure to be built.” That’s not just questionable, it’s blatantly untrue. You can read his comments on Sky News: https://news.sky.com/story/nvidia-boss-defends-ai-against-claims-of-bubble-by-big-short-investor-13464295.
Every major technological leap, from railways to electricity to the internet, required infrastructure. And the story of the early infrastructure overinvestment of dotcom bubble era, which ultimately led to its spectacular POP!, is foremost in the minds of those wondering whether we’re now in a similar bubble of AI’s making. Statements like Mr. Huang’s don’t reassure investors or the public, they invite scepticism.
No one disputes that AI could be transformational, akin to the rise of the internet, but the vast sums being spent look eerily similar to the aforementioned dotcom era – right before 2002. Nvidia’s valuation recently peaked around 60x its price-to-earnings ratio. It has since pulled back, but this hasn’t dampened talks of a bubble – in fact the pullback invites speculation of whether the market is teetering on the edge. The real question is: when the music stops and the lights come on, how big will the clean-up job be?
Poor communications could be the pin that bursts the AI bubble
From a PR perspective, the industry appears cornered. Any attempt to temper market hype risks being the pin that bursts the bubble. Yet silence isn’t an option either. This is where reputation management and crisis handling become critical. Leaders need to communicate with clarity and credibility – not bravado.
Unfortunately, recent events suggest the opposite. OpenAI’s CFO decided (conciously or not is anyone's guess) to cast doubt on whether the company can afford its $1.4 trillion infrastructure commitment, sparking headlines and panic. More from CNN here: https://edition.cnn.com/2025/11/06/tech/openai-backtracks-government-support-chip-investments.
CEO Sam Altman’s follow-up – “If we screw up and can’t fix it, we should fail” – might sound principled, but in the current climate it’s a dangerous soundbite. It plants the idea of failure in stakeholders’ minds at a time when confidence is fragile.
Media training and disciplined communications to avoid PR crisis
This is a textbook example of how poorly managed messaging can snowball into a full-blown PR crisis. Media training, scenario planning, and disciplined communication are essential not only at times like these, when confidence is being rocked, but all the time. Every word, phrasing, insinuation, and allusion counts, and these are the leaders of the most highly valued (over valued?) industry on the planet right now. If it collapses akin to the dotcom era, the ramifications will be widespread.
The AI industry may well deliver on its promise but its leaders must get a grip on reputation management now before the narrative spirals out of control, panic creeps in, and we end up waiting 15 years for the tech sector to regain its current highs.
Lessons for business leaders
Don’t overpromise: Hype without substance invites scrutiny and scepticism.
Train your spokespeople: Media training isn’t optional – it’s essential.
Control the narrative: In times of uncertainty, clarity and credibility are your best assets.
Plan for crisis: Reputation management is not just for when things go wrong, it requires constant vigilance.