The AI Bubble is About to Burst and Nuke a Lotta People
Everyone’s betting the farm on artificial intelligence. But that farm might be in big trouble.
Tech giants, startups, Wall Street, you name it… they’ve all gone all-in on the next “revolution.” But if this feels familiar, it’s because we’ve seen this movie before. The year was 1999, and the internet was supposed to make everyone rich. Companies with no product, no profits, and no plan were valued in the billions… until the music stopped.
Who can forget Pets.com? They were the poster child of the dot-com crash.
They had that goofy sock-puppet mascot and massive Super Bowl ads, but almost no actual revenue. The company raised over $80 million and went public in early 2000… and was bankrupt by November of the same year.
It perfectly symbolized the whole dot-com mess. Huge hype, no real business model, and investors throwing money at anything with “.com” in the name.
Now, twenty-five years later, it’s the same story with a shinier label. AI is the new dot-com, and just like last time, the hype is outpacing the reality at warp speed. Billions are being poured into systems nobody fully understands, run by companies that can’t even explain how their own tech works. And just like before, the herd thinks this time is different.
Spoiler alert: It’s not.
The only question now is who survives when the bubble bursts and how much of the real economy it takes down with it.
Everyone from Big Tech to Wall Street is gambling on AI like it’s a sure thing, but the cracks are already showing. According to recent research, nearly every major company pouring billions into generative AI still hasn’t seen a real return. Even the insiders — from Sam Altman to Jeff Bezos — are starting to admit what’s obvious: this gold rush feels a lot more like a bubble than a breakthrough.
The experts say, this time it’s different. But is it? Sure, the crash might not happen overnight. Maybe instead of one big nuclear pop, the AI balloon could deflate slowly, choking out the weaker players while the giants tighten their grip. But most agree that the warning signs are all there: massive investments backed by a whole lotta hype, self, and tech valuations that don’t come close to reality.
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The thing about today’s AI bubble that makes it a lot worse than the ’90s dot-com mania is that these days, everything is global.
A recent MIT study found that 95% of companies investing in generative AI have yet to see measurable returns. Sam Altman, the chief executive of OpenAI, admitted that “many parts of AI are kind of bubble-y right now.” Amazon founder Jeff Bezos has voiced similar concerns, saying that when excitement peaks, “every experiment gets funded,” even when it should not.
But if AI is a bubble, it may not be one that bursts in a single dramatic pop. Economists suggest it could deflate slowly, squeezing weaker players while leaving giants standing taller. Pierre-Olivier Gourinchas, chief economist at the IMF, told Reuters that, unlike the dotcom bust, the AI boom is “not financed by debt,” which makes a systemic crash less likely. Investors may lose, but the economy will not necessarily collapse.
Still, the scale of investment is hard to ignore. OpenAI is reported to be seeking $1.5 trillion for computing capacity, far exceeding its current revenue streams. Nvidia is not only supplying chips but also investing in AI companies that depend on its hardware.
Analysts have likened this web of “circular deals” to the 1990s internet bubble, where hype fed upon itself until it could no longer sustain the weight.
The World Economic Forum’s president, Børge Brende, recently warned that AI could be one of three major bubbles threatening the global economy, alongside crypto and debt. The Bank of England issued a similar caution, saying that “the risk of a sharp market correction has increased.”
But warnings be damned, the investment money is still coming in hot, hot, hot.
The artificial intelligence (AI) party is still in full swing, with tens of billions globally pouring into infrastructure, startups and attracting the best talent.
Among the headline announcements this year: ChatGPT parent company Open AI, Softbank and Oracle pledged to invest $500 billion (€433 billion) in AI supercomputers, Open AI and chip giant Nvidia announced a $100 billion fund to maintain the United States’ dominance in advanced chips, while Chinese tech giants Alibaba and Tencent hiked investments to help speed up China’s ambition to lead AI by 2030.
Since ChatGPT’s debut in November 2022, AI-related stocks have added an estimated $17.5 trillion in market value, according to Bloomberg Intelligence, driving around 75% of the S&P 500’s gains and propelling companies like Nvidia and Microsoft to record-breaking valuations.
But signs of a hangover are getting harder to ignore. AI usage by corporations is slipping, spending is tightening and the machine learning hype has massively outpaced the profits.
Many economists think usage concerns, barely three years into AI going mainstream, dropkick the prevailing narrative that AI would revolutionize how businesses operate by streamlining repetitive tasks and improving forecasting.
“The vast bet on AI infrastructure assumes surging usage, yet multiple US surveys show adoption has actually declined since the summer,” Carl-Benedikt Frey, professor of AI & work at the UK’s University of Oxford, told DW. “Unless new, durable use cases emerge quickly, something will give — and the bubble could burst.”
The US Census Bureau, which surveys 1.2 million US companies every fortnight, found that AI-tool usage at firms with more than 250 employees dropped from nearly 14% in June to under 12% in August.
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Many believe that the hype is outpacing the hardware. AI’s early boom was built on the promise of nonstop growth and instant revolution, but the numbers tell a totally different story. The trillion-dollar dream is starting to look a lot like Pets.com.
And the hits just keep coming. Everywhere you turn, there’s more bad news piling up about this so-called “AI revolution.” What was once sold as the dawn of a new economic era is now starting to look like a high-tech house of cards.
After years of slow, steady growth, Nvidia’s stock suddenly skyrocketed nearly 1,400% in just three years. It blew past Apple and Microsoft to become the world’s most valuable company, now worth more than $5 trillion. But that number doesn’t just raise eyebrows; it’s raising some major red flags, too.
After years of quiet, solid gains, Nvidia (NASDAQ: NVDA) stock has had a breathless ascent over the three years, climbing nearly 1,400%. It flew past Apple and Microsoft to become the most valuable company in the world, reaching a market value of $4 trillion in July, and it’s now in a league of its own as the first $5 trillion stock.
The combined total of Amazon, Meta Platforms, and Berkshire Hathaway is about $5 trillion, and 9 out of the top 10 companies on the stock market by market capitalization are artificial intelligence (AI) companies. Not only are they the most valuable companies, they’re the most valuable companies by far, accounting for about a third of the S&P 500, which is a weighted index.
When investors talk about “the market,” or when “the market” moves, this is increasingly connected to just a few stocks, rather than the remaining 490 or so stocks in the index. Some analysts are seeing the buildup of a bubble, similar to the dot-com bubble in 2000 that burst — with far-reaching results that put some companies out of business and put the S&P 500 into decline for three consecutive years, the only time that has happened since the 1940s.
So, with just a few stocks accounting for so much of the market’s total value, is the AI bubble about to burst?
If this goes the way bubbles always do, there’ll be a few big winners and a lot of losers. But the biggest casualty might be trust… in the markets, the tech industry, and the idea that innovation automatically equals progress. Fool me once, shame on you. Fool me twice, shame on me.
We’ll leave you with this:
https://revolver.news/2025/11/the-ai-bubble-is-about-to-burst-and-nuke-a-lotta-people/