We remember the internet bubble. This mania looks and feels the same

Summary

The artificial intelligence revolution will be only three years old at the end of November. Think about that for a moment. In just 36 months AI has gone from great-new-toy, to global phenomenon, to where we are today – debating whether we are in one of the biggest technology bubbles or booms in modern times. To us what’s happening is obvious. We both covered the internet bubble 25 years ago. We’ve been writing about – and in Om’s case investing in – technology since then. We can both say unequivocally that the conversations we are having now about the future of AI feel exactly like the conversations we had about the future of the internet in 1999. We’re not only in a bubble but one that is arguably the biggest technology mania any of us have ever witnessed. We’re even back reinventing time. Back in 1999 we talked about internet time, where every year in the new economy was like a dog year – equivalent to seven years in the old. Now VCs, investors and executives are talking about AI dog years – let’s just call them mouse years – which is internet time divided by five? Or is it by 11? Or 12? Sure, things move way faster than they did a generation ago. But by that math one year today now equals 35 years in 1995. Really? We’re also months, not years, from the end of the party. We may be even closer than that. NVIDIA posted better than expected earnings on Wednesday. And it briefly looked like that would buoy all AI stocks. It didn’t. All but Alphabet have seen big share declines in the past month. Microsoft is down 12 percent, Amazon is down 14 percent, Meta is down 22 percent, Oracle is down 24 percent, and Corweave’s stock has been almost cut in half, down 47 percent. Investors are increasingly worried that everyone is overspending on AI. All this means two things to us: 1)The AI revolution will indeed be one of the biggest technology shifts in history. It will spark a generation of innovations that we can’t yet even imagine. 2) It’s going to take way longer to see th...