Microsoft president Brad Smith pushed back against fears of an AI bubble while carefully noting he could only address his own company’s situation, days after the tech giant inked a staggering $250 billion cloud services deal with OpenAI. Speaking with Fortune at Web Summit in Lisbon, Smith projected confidence in artificial intelligence’s staying power despite mounting skepticism about the sector’s financial viability. “From a long-term perspective, I think the answer is no,” Smith said when Fortune asked whether AI had become a bubble. “I think that we’ve got years, if not decades, ahead of us for growth.”Yet Smith hedged his bullishness with a notable caveat. “From a short-term perspective, I’ll only speak for Microsoft; I can’t speak for every company in the industry,” he told Fortune, acknowledging that different players face different realities in the rapidly evolving landscape.

The Microsoft executive pointed to concrete evidence supporting his optimism: the company currently has more customer demand than it can fulfill. “We have an ongoing pipeline of demand and needs, and we see steady growth, and we’re encouraged by where things are going,” Smith explained. He described capacity expansion as Microsoft’s primary challenge, not finding customers willing to pay for AI services.

Smith emphasized the delicate balance required as the AI industry matures, urging that all players remain “thoughtful and disciplined” while staying “ambitious but grounded.” He expressed satisfaction with Microsoft’s OpenAI partnership and the investments flowing from it, according to Fortune.The reassurances arrive amid troubling financial signals. Microsoft recently wrote down its OpenAI stake in an accounting adjustment implying the ChatGPT maker burned through $12 billion last quarter—even as OpenAI’s $250 billion Azure commitment dwarfs its actual revenue generation. The startup’s valuation stands at $500 billion, with Microsoft’s $13 billion investment representing a 27% stake.Infrastructure providers are also feeling pressure. CoreWeave’s stock dropped 6% after third-quarter earnings despite beating revenue expectations, partly because 71% of its income comes from Microsoft—raising sustainability concerns if the tech giant moderates AI spending.

Addressing roughly 20,000 attendees in Lisbon’s MEO arena, Smith underscored that AI has achieved adoption rates exceeding virtually every prior technology wave, positioning it as “one of the defining factors of the quarter century ahead.”Smith spotlighted emerging applications demonstrating AI’s disruptive potential, including his meeting with Anton Osika, whose startup Lovable empowers anyone to build applications simply by talking to an AI model. “What they’re doing to change the prototyping of software is breathtaking,” Smith told the audience. “As much as anything, what these kinds of AI initiatives are doing is opening up technology opportunities for many more people to do more things than they can do before.“