Zoho Founder Warns of Massive US Market Bubble and Potential Financial Crisis

Zoho's Chief Scientist and Co-founder Sridhar Vembu

Zoho's Chief Scientist and Co-founder Sridhar Vembu expressed agreement with former IMF Chief Economist Gita Gopinath on Saturday regarding the substantial economic bubble currently present in the US stock market.

Vembu cautioned that a systemic event comparable to the global financial crisis of 2008-9 remains a possibility that cannot be dismissed.

The Zoho founder responded via the social media platform X to Gopinath's warning, stating: "I agree with Dr Gita Gopinath. The US stock market is in a clear and massive bubble. The degree of leverage in the system means that we cannot rule out a systemic event like the global financial crisis of 2008."

Vembu further emphasized that the current gold price trend serves as an indicator of systemic financial risk.

"Gold is also flashing a big warning signal. I don't think of gold as an investment, I think of it as insurance against systemic financial risk. Ultimately finance is all about trust and when debt levels reach this high, trust breaks down. I am sure AI will work hard to repay all the debt in the system," his post on X explained.

His post referenced Gopinath's warning which highlighted that global exposure "to US equities is at record levels."

"A stock market correction would have more severe and global consequences as compared to what followed the dot-com crash. The tariff wars and lack of fiscal space compounds the problem," Gopinath noted.

She advocated for higher growth and returns across multiple countries and regions rather than focusing solely on the US, adding that the fundamental issue is not "unbalanced trade" but "unbalanced growth".

Earlier in the month, Gopinath stated that US President Donald Trump's tariff proposals functioned as a tax on US consumers, increased inflation, and provided no benefit to the American economy.