Is the current generative AI boom just a later generation’s dot-com bubble? 


I’m dating myself, but I got my IMBA and re-entered the workforce in 1998—into the software industry. I experienced first-hand how the lead-up to Y2K coupled with the advent of widespread internet usage created a huge boom of irrational behavior in the tech sector in the late 90’s.

Today, I speak with a dozen or so startups each week, and I can’t help but draw comparisons between the current generative AI boom and behavior patterns I saw during the dot-com bubble…


  • High levels of investor hype and speculation: Both today’s generative AI boom and the late 90’s have seen a surge in investor interest and excitement, leading to potentially inflated valuations for companies involved in their respective technologies.
  • Business Practices: I see some of the same questionable business practices (and honestly, business ethics) today that led to the bubble bursting in 2000. Everything from trying to amass customer counts at the cost of revenue to inflating pipelines and customer counts with Letters of Intent. I believe these practices in the late 90’s led to customer sat problems, and ultimately the rise of the Customer Success movement…I don’t see that CS focus in many generative AI companies today.
  • Focus on potential rather than proven applications: During the dot-com bubble, many companies lacked clear and sustainable business models, relying heavily on the promise of future internet-based services. Similarly, some generative AI companies might be overvalued based on their potential applications rather than their current ability to generate revenue or provide solutions.
  • Rapid growth and influx of new players: Both periods have seen a rapid increase in the number of companies entering the market, often with limited experience or resources. This can lead to a saturated market and competition for resources, including experienced senior leadership with business experience.
  • Underlying technology: This generative AI boom is fueled by a relatively new introduction of the technology, similar to the early days of the internet when the technology was still nascent.
  • Market maturity: The technology industry and financial markets are generally more mature and experienced compared to the late 1990s. This could lead to more informed investment decisions and potentially mitigate the risks of a bubble bursting. But I worry the new generation of tech founders and investors has forgotten the lessons learned by their forefathers.


I’d like to hope this current generative AI boom will ultimately avoid the dot-com bubble’s arc that ended in a major crash. But I am worried by some of the things I see from market participants. That being said, the dot-com bubble brought about great transformative impacts to society and the way business is conducted today. I expect nothing less from this current generative AI trend. There are some incredibly great companies in the mix—just do your due diligence.

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