AI is driving a market bubble that's unlikely to burst, veteran advisor says

As tech giant Nvidia soars on hype around artificial intelligence, and global stock indexes notch record highs, debate has grown about whether the stock market has entered a "bubble."

That's generally seen as a period in which asset prices inflate rapidly, potentially beyond their core value — and risk crashing just as fast.

Bob Parker, senior advisor at trade body International Capital Markets Association, told CNBC's "Squawk Box Europe" on Wednesday he saw signs of a bubble based on two of three main characteristics.

"The first [characteristic] is obviously looking at valuations. If we look at the valuation of Nvidia, justifiably it is actually very high indeed," Parker said, adding that the second sign is investor positioning.

"Whenever you have a market bubble, investors are very clustered or very concentrated, either in one market or in one sector.

"And it doesn't matter whether you look at the U.S. or Europe or some of the Asian markets, you know, we've got this historic wide valuation between the tech sector, and obviously AI as a sub-sector of the tech sector, and the rest of the market.. Investors are very clustered in that tech sector," Parker said.

The topic has been dividing market watchers. JPMorgan Chase CEO Jamie Dimon told CNBC on Monday that he does not see AI as a bubble, emphasizing: "When we had the internet bubble the first time around … that was hype. This is not hype. It's real." 

Yet Torsten Sløk, chief economist at asset manager Apollo, published a chart this month, comparing the valuations of the top 10 companies in the S&P 500 with their counterparts during the 1990s boom and calling the "current AI bubble... bigger than the 1990s tech bubble."

While he acknowledged the signs of a bubble, Parker is