Recently had a basement finished, what started out as a small air bubble has gotten much larger. There has been no water damage done to the flooring, wondering if the contractor did not leave enough space for floor to expand? Is there any other reason that this would happen?

You have figured out the two most likely causes. If you can remove your baseboard and find flooring tight against the wall, then you have confirmed the problem. If that is the cause, then cutting the excess flooring away underneath the base will relieve the expansion pressure and let the bubble settle down. It will not go down right away, but will eventually if this was the cause.