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As hype around AI continues to swell across healthcare, MobiHealthNews asked industry leaders whether the sector is in the midst of an AI bubble or simply experiencing the growing pains of a transformative technology.
Here is Part 1 of healthcare leaders' thoughts on whether the industry is facing an AI bubble:
Roland Rott, president and CEO of imaging at GE HealthCare
I don’t believe we’re in an AI bubble within medical technology, but we are certainly seeing elements of hype – high expectations, pressure and big promises on the potential of AI broadly. Some ideas are over-promised – such as AI replacing doctors overnight or massive cost savings without clear delivery.
Today, nobody would question the lasting impact of technologies like the internet or of high-performance personal computing including smartphones – similarly, AI is here to stay and has enormous potential. We are just at the beginning of fully embracing the opportunities of AI in general and, specifically, in healthcare. But arguably there is a hype as well and that will undergo correction and maturation. While some ventures may fail or fade, and some promises will be scaled back, the core shift of imaging and diagnostics being AI-enabled is here to stay.
Our significant, sustained investment in a rich pipeline of AI innovations and our strategy of fostering an open ecosystem through partnerships and acquisitions demonstrate a long-term commitment to practical, clinically integrated solutions. AI is consistently delivering tangible value by addressing pressing healthcare challenges like staffing shortages and patient backlogs, proving its indispensable role as a "copilot" that augments human capabilities rather than existing as a fleeting trend.
Julia Strandberg, chief business leader of connected care at Philips
I don't think we're in an AI bubble. With more than a thousand AI-powered tools already FDA-cleared for clinical use, and that number growing, we’re entering a critical maturation phase where we're learning what tools translate into real-world value and which fall short.
My bigger concern isn’t the bubble, but whether we're implementing these tools ethically and effectively. AI adoption is built on trust. If we push tools that aren’t usable, equitable or clinically sound, we risk eroding that trust. The encouraging news is that healthcare leaders are asking the right (and sometimes difficult) questions about equity, usability and long-term sustainability to help pre-emptively address future concerns.
Antoine Pivron, vice president of Withings Health Solutions
Bubbles form when expectations outpace reality, but in healthcare, I believe the real work of AI is much more grounded: giving patients and clinicians the right information at the right time so they can make the right decisions. Not constant alerts, not fully autonomous care, just precision guidance informed by real patterns in real data.
AI isn’t rewriting roadmaps. It is compressing them, accelerating the development of personalized tools that once felt years away. And that acceleration matters, because it is impossible for all AI features to become core to clinical workflows. However, the capabilities that fit best with standardized workflows will have the ability to personalize care. Personalization is the engine of retention, engagement and ultimately, better health outcomes, which are three of the pillars that determine whether this industry finally bends the cost curve. So no, we’re not in an AI bubble. The hype might burst, but the underlying value won’t. Because once you speed up the ability to personalize care, and once you prove that personalization improves retention, engagement and cost, there’s no going back.
Neil Patel, head of ventures at Redesign Health
We are currently in an AI hype cycle, but it is not a pure bubble. While valuations have clearly run ahead of fundamentals for some companies, and a correction is expected, the underlying drivers are very real. These drivers (workforce shortages, aging populations and unsustainable costs) position AI as one of the few levers that can bend the cost curve in healthcare. At Redesign, we are already seeing a separation between simple "AI features" that will not justify standalone companies and true AI-native businesses with durable moats and strong unit economics.
Punit Singh Soni, CEO of Suki
[On whether an AI bubble exists:] Yes and No. It's clear that there is indiscriminate investing and most of the AI companies will not succeed. It is also clear that the success story of the near future in every sector including healthcare will be an AI company. Both statements can be true at the same time. Knowing which companies matter is the age old puzzle that few know how to solve.
Eyal Zimlichman, founder and director of ARC and chief innovation, transformation and AI officer at Sheba Medical Center
We're in a small bubble. We need to be a little more cautious about AI. There's a gap between the needs of the market and enthusiasm to embrace it, and the capability of AI to scale. That is why I think things will progress a little slower than people imagine.
Marten den Haring, CEO of Lirio
We are not in an AI bubble per se, because AI represents a once-in-a-generation technological shift that is helping solve some of society’s biggest challenges, reshaping the global economy and improving lives. In short, the potential value of AI remains far greater than the amount of investment in AI to date.
However, there is a bubble emerging within the AI sector that has been created around the hype of pursuing nebulously defined capabilities, such as Artificial General Intelligence (AGI) and Artificial Superintelligence (ASI). There is a skyrocketing amount of capital being funneled into building the AI infrastructure that will enable AGI and ASI, justified by the expectation that scaling existing foundation models will lead to extremely valuable companies.
At Lirio, we believe that real value will continue to come from new ideas about how to model the world and from developing solutions to specific problems where the patterns of interest are not simply visual or linguistic. Therefore, it is possible there will be a broad market correction when the AGI/ASI bubble bursts.
Muthu Alagappan, founder and CEO of Counsel Health
The fundamental value of AI is extraordinarily high and will likely have an impact far beyond what we can fully imagine today. In that sense, I don’t believe we’re in a bubble, because market enthusiasm hasn’t exceeded the underlying potential. That said, it’s also true that many individual AI companies will not survive. So while the overall market may not be a bubble, specific companies may be valued far above their true long-term prospect.
Brijesh Patel, head of innovation and AI at Pyx Health
A bubble exists, but it’s not questioning AI’s place in healthcare. It’s about too many companies building the same thing. Funding patterns tell that story, as AI-focused digital health ventures took 37% of U.S. investments in 2024, rising to 60% to 62% in early 2025, with deals averaging twice those for others.
According to a Menlo Ventures 2025 report on AI in the sector, 85% of spending on generative tools goes to new companies over established players. Much of this funding is clustering around similar products like voice-assisted notes, approval streamlining and billing aids, frequently with little unique value. Consolidation seems inevitable in those segments.
Yet the demand for AI remains solid. Underserved groups like those on Medicaid, Medicare Advantage or dual plans benefit greatly from AI support, especially in the face of healthcare staff shortages and burnout. AI is already helping imaging, heart care and distant tracking, with the FDA authorizing over 1,250 such devices by mid-2025. Research now backs benefits, as well, such as lighter admin loads in practice.
So, it’s not a "fade away" scenario for AI. It’s more a case of excess niche tools without solid validation. The cull will center on accountability: Does it free up clinician hours, speed assessments, sustain benefit access or link more to vital supports like shelter and mobility?
Mudit Garg, CEO and founder of Qventus
If you look at the long arc, AI will make a tremendous difference. I'm confident of that. But just like every previous technological shift of substance, there's a cycle. In 2001, everyone believed the internet would be transformative. And sitting here in 2025, it absolutely has been. But there was definitely a period where we had all these new capabilities and didn't yet know how to deploy them effectively. We tried things that didn't work. We went through a trough of disappointment before figuring out what actually created value.
We're about to go through that same cycle with AI. Healthcare hasn't hit the disappointment phase yet. We're still in the excitement stage. So yes, there's disillusionment coming. But on the other side of that, we'll see the truly transformative applications scale.
Richard Vincent, cofounder and CEO of FundamentalXR
We are absolutely in an AI-driven market bubble, but not a technology bubble.
The underlying innovations – agentic AI, multimodal reasoning, world models and robotic integration – are enduring and transformative. They will reshape healthcare over decades, but the infrastructure investment cycle surrounding them is overheated. Hardware demand projections, hyperscale build-outs, vendor-financed GPU purchases and trillion-dollar valuations are not sustainable.
When the market corrects, the need for AI in healthcare will remain unchanged: Rising patient volumes, shrinking workforces, increasing procedural complexity and expanding data loads demand automation and advanced training. The froth will dissipate; the value will persist.
Claire Rudolph, cofounder and head of product at WellTheory
I believe we are in a bubble regarding the idea that AI can replace the human element of care. There is a fundamental misunderstanding of what healing actually requires, especially for autoimmune patients.
Healing is not just a transaction of data; it is an experience of being seen. AI can simulate conversation, but it lacks the capacity for empathy. It cannot witness a patient. When you are navigating the loneliness and confusion of a chronic illness, the most powerful intervention is often just having another human being hold space for you and validate your reality.
An algorithm can predict your next symptom, but it cannot make you feel understood. As we see more "tech-first" solutions fail to move the needle on outcomes, that bubble will burst. The future isn't about removing humans to save costs; it's about realizing that to achieve long-lasting healing, the human connection is the one variable you can't automate.
