Is healthcare in an AI bubble?

Is healthcare caught in an AI bubble — a phenomenon in which enthusiasm inflates the perceived value of a technology far beyond its real-world worth?

When Politico interviewed Nvidia CEO Jensen Huang for a Nov. 11 story, he predicted that $3 trillion to $4 trillion will be poured into AI infrastructure by the end of the decade. Howard Forman, a Yale professor of radiology, public health and economics, told the publication that healthcare AI is part of that ballooning bubble. But do CIOs, the executives steering technology adoption across U.S. health systems, see it the same way?

CIOs across the country say the answer is more complicated than a simple boom-or-bubble binary. Many describe a market that is overheated, flooded with vendors and lofty promises, yet simultaneously anchored in real, measurable transformation that is already reshaping clinical and operational workflows.

“AI in healthcare isn’t a bubble — it’s a fundamental shift,” Jordan Ruch, CIO at Atlantic City, N.J.-based AtlantiCare, told Becker’s. “Unlike the dot-com era, today’s investments are anchored in clear clinical and operational outcomes: improving workflows, reducing administrative burden, and enhancing patient engagement.”

He pointed to measurable, present-day returns. 

“We’re seeing 40% less time spent on documentation, freeing clinicians to focus on care instead of paperwork. That’s not theory; it’s measurable improvement.” 

The question now, he said, isn’t whether AI will endure, but how it will scale responsibly with the right guardrails. 

“This is genuine transformation… AI is becoming a foundational layer of healthcare delivery rather than a passing trend,” he said.

Darrell Bodnar, CIO of Whitefield, N.H.-based North Country Healthcare, echoed that assessment, saying the technology’s staying power is already clear. 

“AI in healthcare is absolutely here to stay,” he told Becker’s. 

While the influx of vendors resembles early dot-com-era exuberance, he sees consolidation, not collapse, ahead. 

“The real value will ultimately come from the few who deliver measurable outcomes…. This is less of a bubble and more of a lasting transformation still in its early chapters,” Mr. Bodnar said.

Other CIOs describe a more nuanced reality: AI’s clinical and operational impact is real, but the market surrounding it is overheated. 

“The market is overheated, but the clinical and operational transformation is real, durable, and already embedded in care,” Omer Awan, CIO of Seattle-based Fred Hutchinson Cancer Center, told Becker’s. 

Oncology workflows, from imaging to pathology to trial matching, already rely on AI augmentation, he said, and pressures like data overload and workforce shortages make the technology “necessary, not optional.” 

At the same time, Mr. Awan said, “the bubble exists” in the form of vendor proliferation and thin evidence backing many point solutions.

 “Valuations and hype [are] outpacing health systems’ ability to adopt safely. The bubble will pop; the transformation will stay,” he said.

Tom Bartiromo, CIO at West Reading, Pa.-based Tower Health, sees a similar dynamic. 

“I do think we’re in a bubble… maybe one built on truth,” he told Becker’s. “The technology is transformative, but valuations and vendor promises have outpaced operational reality.” 

A correction, he said, “will mark its maturity,” leaving behind the systems that integrated AI “quietly, safely and measurably.”

Some compare the moment to earlier technology cycles that burned hot before settling into long-term value. 

“AI feels unstoppable — but so did the dot-com boom,” said Edward Maule, CIO at Richardson, Texas-based Advocare, told Becker’s. 

He agreed with other CIOs stating that many products being marketed today “do not deliver on their promises,” yet he cautions against withdrawing from the space. 

“Those that stop chasing AI because of that will regret it. In the words of Ethan Mollick, ‘This is the worst AI you’ll ever work with,’” Mr. Maule said.

Other leaders argue the bubble isn’t in the technology at all — it’s in the marketing of it. 

“AI in healthcare isn’t a bubble, but the hype around it is,” Rick Leesmann, CIO at Klamath Falls, Ore.-based Sky Lakes Medical Center, told Becker’s. 

He said the real differentiator is whether organizations use the technology to solve genuine problems. 

“The organizations that will win are the ones embedding AI into workflows that genuinely make life easier for clinicians and care safer for patients,” he said. 

Deploying AI just “to check a box,” he warned, is where “the bubble bursts.”

John McFarland, CIO at Tampa, Fla.-based Shriners Children’s, said inflated expectations often stem from mislabeling and overpromising. 

“The marketing surrounding AI has significantly exaggerated its true market,” he told Becker’s, noting that many so-called AI products are “merely rebranded robotic process automation.” Still, he doesn’t foresee a dramatic collapse. Instead, he expects a recalibration. 

“We are on the brink of the next industrial revolution,” he said, one where staff move into “higher cognitive roles,” much like workers who once transitioned from manual assembly work to managing robotic processes.

Veteran CIOs say today’s moment resembles earlier eras of overexuberance, but with critical differences that suggest the technology will outlast the hype. Tom Gordon, CIO at Marlton, N.J.-based Virtua Health, sees parallels to the dot-com boom, when breakthroughs and inflated expectations collided. 

“Some AI solutions are being marketed before they are fully validated,” he told Becker’s. 

But he also points to a more mature digital infrastructure and a more knowledgeable market. 

“In my view, AI in healthcare is not a bubble in the traditional sense,” Mr. Gordon said. 

While some startups will falter, “the underlying transformation is real and lasting.” The organizations that thrive, he said, will combine careful governance with innovation. 

“If we approach this wave with both ambition and discipline, we are building something enduring — far beyond the fate of any single bubble,” he said.

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