ai bubble

Posted: January 10th, 2026 8:41 PM

tldr; why does it seem like no one is really talking about the ai bubble in the seemingly correct way?

the dot com bubble of the 90's reads like a movie on social media forums and like an issue of 'some bad actors' from financial institution blogs. of course there are some truths in each of these sources, while neither captures the true essence of the bubble. it seems like there is some similar narrative around the '08 crisis despite there only being ~10 years between the two events. that in itself is a remarkable story. swindlers, criminals, liars, and cheats managed to impact the US economy in a non-negligible way not once in their lifetimes, but twice.

the eli5 of the dot com bubble is true of any emerging technology (perhaps industry even, but i haven't looked into this too much). a group of people discover a highly monetizable product, strategy, or service and then convince the people with the money that they should invest some of that money in order to grow it in the future when the highly successful thing comes to fruition. the people with the money give their money to the group of people in charge of the company to bring the thing to fruition and, surprise, they don't bring the thing to fruition and keep the money anyways. that idea at exa-scale is what took down the NASDAQ by 75%+ in the 90's and is now coined 'the dot com bubble'. there should be extra emphasis on the idea that the companies asking for money were spending most of their funds on advertising in an attempt to reel in sales, additional investors, or cull together hype. the misappropriation of funds during those ~8 years was unfettered.

what has confounded me in the past year of hearing many people discuss the ai bubble that we are currently in is why no one talks about what happened after the bubble. for example, most anti-ai zealots love to reference the dot com bubble as the impending ruin of the ai bubble that we are in today. however, they always seem to forget that just hours before talking to me they used some internet site to do something critical to their life. we pay our bills with the internet, manage our banking, build companies, build currencies, share our lives, order food, order packages, send mail, receive donations and the list is unending. despite there being a dot com bubble, the dot com stayed. it permeated our lives and it isn't leaving until the next thing comes. to argue that the next thing is not going to be ai seems thoughtless.

there have definitely been groups that have formed around ai, in the same way that groups formed around cryptocurrency. each groups having cult like beliefs causing division. lines have definitely been drawn. one group is the anti-ai movement. this group reduces to several different factions. one claims that the new world order has been using and is now empowered to use more ai to control and direct the outcomes of our lives. another believes that ai is the worst thing to happen to the planet and climate since the industrial revolution. another believes that an ai agent is no smarter than the average software engineer. most of the views of this group seem to be driven by fear, insecurity, and ignorance. FUD has turned into FII.

another group is the pro-ai movement who believe, generally, that we are in the second renaissance and a better industrial revolution. one faction in this group holds the deeply rooted belief that ai is the technological embodiment of a celestial being. another faction thinks that ai should be injected into everything for the sake of utility gains.

of course there are some truths (partial truths) in most of what is said from either group. however, from either side there seems to be this miss of actual reality. i'm not talking about psychological phenomena or bias, i am talking about the actual impending reality. we are in an ai hype cycle which does not compare to what happened during the dot com bubble.

in the years leading up to 2026 there have been blatant instances of fraud. companies who were using humans and claiming that ai was doing all the work, companies who were really doing nothing, and any other imaginable 21st century scheme. however, there has not been as wide spread fraud (seemingly) as there was during the 90's. what seems to be the case is that the amount of funding being given to any company 'innovating in ai' is orders of magnitude greater than was handed out in the 90's. i'm sure that someone could cite an accounting for inflation and show that it is actually monetarily similar, but it doesn't feel that way when Ilya can start his own venture with $1B in funding and no product or service. i am confident Ilya can make it happen, i don't argue that. i argue that funding that size was not given out during the dot com bubble.

that is an argument against the pro-ai movement. the anti-ai movement misses the mark on what will happen when the bubble pops. | as an aside, i am not actually certain that the word bubble is the correct one. it seems to not correctly reflect the environment we are experiencing | ai will not go away the way that dot com anything did not go away. ai will only get better and will continue to infiltrate our lives and society. this means that whether or not there may be instances of fraud and despite the hype seeming to not live up to the promises, we need to be better equipped to use and improve ai. there is such thing as being left behind and it has happened throughout history with every single emerging technology. it happened with horses and cars, it happened with brick and mortar and the internet, it happened with strip malls and ecom, it will happen with manual work and ai.

i need to read more about the overall belief, growth, and proliferation of ai before i form an opinion around the question of 'why does no one seem to speak about what is happening in terms of what is actually happening? especially considering that this same thing has happened multiple times before'. intuition says that ai is so polarizing that no one can analyze the situation in the light it is taking place. there's also a general greater division slicing through the life of every person and the world as a whole. you root for this team or that one, you vote this way or that way, you like this game or that one, you hate this show or that one. the grey area continues to reduce to nothing.

lesson

ai will improve. when the bubble we are in pops, ai will not disappear. it will grow quicker and sink into our lives with a stronger impact than before. this will drive competition in the industry leading to better improvements. with a difference in the quality of companies coming out of the ai bubble vs. the dot com bubble, it seems that many rich people will become richer.

learn about how the brain works. study ai. how to use ai, how to make ai, how to improve ai, how to train ai. it is here to stay.