“AI is all hype!”
“AI will change everything!”
Of the good ones building AI businesses, I've read that everyone seems to be one of these two camps.
The truth, as history shows, is more complicated. When you examine the patterns predicting disruptive technologies, you will find that both theories are often true at the same time. To illustrate this point, let's examine the famous dot-com dot of the late 90s.
Lessons from the past
To analyze the Internet Boom, we will use Cisco systems as a proxy for the broader technology market because it was the backbone of the first Internet.
At first glance, Cisco's stock chart looks like a Boom-and-Bust story. But if you look closely, the insenduction points tell a much richer story. As we explore these different categories, you may find patterns similar to the current AI cycle.
1) Cruel Category
If you asked someone in the early 90s what the Internet was all about, the answer would probably have been something like chat rooms. A few years later, the common responses changed to piracy. But does anyone define the Internet this way today? Don't get too close.
This is a prominent section. Early Translators are excited about technology and its potential, but many of them say they have met ordinary people who don't understand technology and haven't seen it affect their lives.
As an early adopter myself, I can still remember trying to convince my parents that it was safe to provide your credit card number on an Internet Phreenlines called Amazon. But the light began to shine. Little did we know, we were in the CUSP of the fastest phase of technology development.
2) the hype stage
Then the perfect storm hit.
Eventually people started to get it. Nothing seems impossible. Fun websites like eBay and ask Jeeves seemed to pop up every day. Everyone was looking forward to hearing a friendly voice announce “you got mail!” Whatever the future holds, it is widely agreed that it will be big.
It also took the tribes of the wild west. Search engines are underwritten. It came from hackers and scammers, followed quickly by a new industry to stop them. Schools have accused students of “cheating” through online sources. And then there was Y2K, napter, and the idea that the Internet was getting out of control.
Then come the best bad ideas.
Pets.com. Webvan. The Flooz. If you had a “.com” in your name and in the cross section, that alone would raise millions. The prevailing wisdom was “If you build it, they will come.” Except they didn't, and the math wouldn't work.
3) danger
Eventually the market tightened, interest rates rose, incomes fell, and the illusion was shattered. The NASDAQ fell nearly 80%, wiping trillions of dollars in value. The start disappeared overnight. I cycled through a few email addresses as closed services.
I personally couldn't help but feel at a loss. This is a promising future that I think is too good to be true. For many, that's where the story ends. Just another cautionary tale of boom-and-bust cycles for business schools to study.
But this is not where the story ends. There was only one category, and it was very important to all.
4) A new paradigm
What CISCO's chart doesn't show is that, adjusted for splits, the stock price has almost reached the hype peak. Yes, there was snake oil. Yes, many companies have failed. But those who got it right (eg Amazon, Google, eBay, PayPal) became world-defining giants. And many giants rose from the ashes.
The dot-com crash didn't kill the Internet. It cleared the field and gave birth to today's technology industry.
Today almost every customer-facing business has:
- Website
- Digital Marketing Campaigns
- SEO strategies
- Cloud infrastructure
Entire industries are dedicated to all of these and more.
Is the Internet Decorated? Of course.
Has everything changed? Of course.
The era of ai
Now let's stop Nvidia on the same chart. In case you're not familiar, nvidia cards make the most important graphics cards for training AI models. As an enabling company, it is essentially the Cisco of the AI era.
Before I ate them, I suspected that the patterns might be able to wander freely. But the similarity was more than I expected. It was very similar. Not this again!
Let's walk through the AI cycle so far so you can see if it's still relevant.
1) Cruel Category
Notice the new AI section of the section started with chatbots, similar to the Internet starting with chat rooms. At least people aren't downloading illegal content, right? No, they are building on this.
Some patterns repeat themselves almost completely.
2) the hype stage
Today, we are in the hype phase. Amazing ideas for AI are emerging every day. All industries are changing.
And yet the wild west feeling is inescapable:
- People launch AI products without knowing if it is legal.
- Deepfakes and new scams are emerging, with industries emerging to replicate them.
- Schools are cracking down on Ayi cheating.
- People who worry the world will end.
Déjà vu.
Bubble or not, big tech and all-in AI. They remember how the Internet cycle turned the world upside down. They don't want to start a following to use their property.
But then again, there's a lot of snake oil:
- AI Lipstick is inspired by classic products
- “.Ai” Domains replace “.com” Mania
- AI experts all night everywhere
And sadly, many businesses have already been burned by misuse and now believe that “Ai is hype.” I can't count how much I need to explain:
“If you needed brain surgery, you wouldn't go to an experienced neurologist. You can't expect someone to create intelligence after a short bootcamp.”
Or:
“AI can be trained with a single line of code or built as a completely customized solution. Both are marketed as 'AI,' but only one will have a positive impact on your business.”
Sorry for the rant. It just comes to me.
3) danger
At some point there will be a correction. But please note, this is not stock advice. Even if the pattern holds true, it's rarely the same. Don't go fast for nvidia stock yet.
But market cycles do rhyme. Sometimes the market will tighten and many AI Startups will disappear. I have seen this firsthand as I have demonstrated it at business conferences.
Three years ago, there were four booths of almost two hundred AI companies. The following year at the same conference, half of them were AI companies (mostly chatgpt wrappers). This year, maybe fifteen remained.
Businesses know they need AI, but they fear rejection and wait for the path to be clear. Waiting can feel safe.
But it is also dangerous.
4) A new paradigm
“Whatever you do, just start. You don't want to see a visible trend because in a few years you'll be far from amazing.”
– Jensen Huang, Nvidia CEO
I know you are a little headstrong, but you have a point.
AI Systems Compound over time. Companies that start to entertain, learn and adapt now will be long gone when the dust settles. After the dot-com crash, many marginal businesses lost market share or disappeared altogether. Those who depended were the market leaders.
And now, we are already seeing big shifts:
- New fields are building AI security
- Vector and Graph Database We Know First
- New roles focus on AI experience management
- And perhaps the turning point of this era: the rise of the AI-enabled Solopreneur (stay tuned for an article on this)
Lasting
Therefore, the AI is completely degraded. But it doesn't go with it desire Change everything.
The Internet is not limited to chat rooms. AI will not end with chatbots.
Disruptive technologies like this don't come around very often.
The question is not whether AI will take over the world.
Regardless, you're going to take back the world with AI.
about me
With more than ten years of experience in AI Science and as the founder of the AI model, I specialize in machine learning architecture, decision support models, and LLM integration. You can find me here:
