'Peak AI' behind us, Damodaran warns smaller firms face shakeout

A smart teacher named Aswath Damodaran, who teaches at New York University, studies companies and money.

He told a TV show called CNBC that the biggest excitement about artificial intelligence may already be over.

Artificial intelligence, or AI, is when computers learn to do smart things.

Lately, many people were buying shares in AI companies because they thought those companies would grow very fast.

Mr. Damodaran thinks the best time for that excitement has already passed.

He worries that smaller AI companies could get into trouble because they do not have as much money to survive hard times.

Some AI stocks have already dropped a lot in value.

He says the biggest technology companies are in the safest position, but even they are borrowing lots of money to build big AI projects.

He thinks people are buying AI stocks again mostly because they fear missing out, not because companies are earning more money.

He hopes everyone will check whether AI companies really make enough money from their big spending.