I think it's a bit fallacious to imply that the only way we could be in an AI investment bubble is if people are reasoning incorrectly about the thing. Or at least, it's a bit reductive. There are risks associated with AI investment. The important people at FAANG/AI companies are the ones who stand to gain from investments in AI. Therefore it is their job to downplay and minimize the apparent risks in order to maximize potential investment.

Of course at a basic level, if AI is indeed a "bubble", then the investors did not reason correctly. But this situation is more like poker than chess, and you cannot expect that decisions that appear rational are in fact completely accurate.