Lauren Taylor Wolfe, co-founder of activist investment firm Impactive Capital, said the surge in enthusiasm around artificial intelligence has all the markings of a bubble.

"We are absolutely in an AI bubble now. It is going to burst," she said on CNBC's " Squawk on the Street " Tuesday to David Faber . "I don't know when, I don't know the order of magnitude. A lot of people are going to lose money."

Her remarks come as enthusiasm for AI continues to drive markets higher, with investors betting the technology will transform industries and lift corporate earnings. Taylor Wolfe said investors are underestimating the risks tied to the surge in AI-related spending by major technology companies.

"There are trillions of dollars that are being earmarked to be spent relative to hundreds of

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