https://craigmccaskill.com/ai-bubble-history
"The four words that precede every crash: “This time is different.”
Except this time, the person warning about a bubble is Sam Altman, the CEO most
responsible for creating it. When OpenAI’s chief executive warned last week
that investors were “overexcited” about AI, markets reacted immediately. Nvidia
fell 3.5%, Palantir dropped nearly 10%, and the selloff spread globally.
The warning came amid a cascade of seemingly supporting data. That same week,
MIT researchers published findings that 95% of companies investing in
generative AI were seeing no measurable returns. Apollo Global Management’s
chief economist warned that current valuations exceeded even dot-com bubble
peaks. And Federal Reserve data showed AI investment consuming more than half
of America’s total capital expenditure.
The numbers tell the story. Anthropic raised $5 Billion at a $170 billion
valuation despite negligible revenue. Character.AI hit $1 billion in valuation
with 1.7 million monthly users—roughly $588 per user. Inflection AI raised $1.3
billion before essentially acqui-hiring its team to Microsoft, leaving
investors with an empty shell.
Ray Dalio, founder of Bridgewater Associates, told the
Financial Times the
current environment mirrors 1998-1999, warning that while AI will certainly
transform the economy, investors are “confusing that with the investments being
successful.”
Sound familiar? It should. This exact sequence—revolutionary technology,
abundant capital, speculative frenzy, then sudden reality checks—has played out
with remarkable consistency for over 180 years. Railway Mania in the 1840s.
Radio stocks in the 1920s. Dot-com fever in the 1990s. Each time, the
technology was real. Each time, the speculation was unsustainable. Each time,
the overbuilding became tomorrow’s foundation."
Via Esther Schindler, who wrote "What the bubbles of the past can teach us
about the AI bubble."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
