• CNBC's Jim Cramer on Tuesday defended the artificial intelligence boom.
• He suggested the movement is different from other capital expenditure booms sparked by the private sector in part because of the sheer wealth of its Big Tech leaders.
• "This might be the boom that doesn't go bust, because the players are so well capitalized it simply doesn't have to end that way," he said.

CNBC's Jim Cramer on Tuesday defended the artificial intelligence boom. He suggested the movement is different from other capital expenditure booms sparked by the private sector in part because of the sheer wealth of its Big Tech leaders.

"This might be the boom that doesn't go bust, because the players are so well capitalized it simply doesn't have to end that way," he said.

He acknowledged the apprehension around data center proliferation. He said some on Wall Street see similarities to the dotcom bubble of the late nineties, referencing recent commentary from Alibaba Chairman Joe Tsai. Tsai spoke of massive spending on AI buildout, saying he sees see the "beginning of some kind of bubble." Meta, Amazon, Alphabet and Microsoft intend to spent as much as $320 billion combined on AI technologies and data centers in 2025, CNBC reported, up from $230 billion in 2024.

Cramer first pointed out that there were a few companies that emerged winners from the dotcom bubble, like Alphabet and Amazon. And while the data center boom could be an expensive bust for some, it could enable others to "make out like bandits," he said. Cramer referenced a recent piece by Deutsche Bank that analyzed booms and busts throughout history, where researchers noted that some private sector booms were financed with debt and stock issuance. But the AI boom consists of companies that are "basically incredibly well-financed nation states with unlimited fire power," Cramer countered.

He also disputed the idea that the AI craze is a typical private sector boom because of the technology itself. AI has vast potential across a variety of arenas, Cramer claimed, likening the technology to the industrial revolution. He also suggested there are use cases for AI that are not yet known and recalled his time at Nvidia's AI conference in San Jose last week.

"It's just too early to find out the winners because everything's so new and we don't know what these companies are really working on," he said. "When I was at GTC, the Woodstock of AI, I saw things I didn't even think were possible — more important, I saw things I'd never even imagined, and that's why I don't think it's a bubble."

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