Part 2: TECH BUBBLES & HYPE CYCLES

Market Speculative Exuberance from the Late 1990s to Present

Nov 25, 2025

Is the AI bubble the latest in a trend of bubbles, hype cycles and bursts that have characterized the tech industry since the late 1990s?

As the market rallies around AI and adjacent companies, one may wonder if this is unprecedented or history repeating itself. I want to take a step back and explore major bubbles and hype cycles while attempting to answer the question - what next?

See part one for introduction

My aim with this article is to let you see the precedent, recognize the trends, read my opinion on the matter and possibly come to your own understanding.

The list

Opinion Piece

From the mid-2010s up to the Covid-19 pandemic, another series of bubbles and hype cycles emerged. First came the unicorn bubble, ushered in by extreme, growth-obsessed valuations in Software-as-a-Service and sharing economy startups. The focus on these startups, dubbed “unicorns,” was driven by projected future value from products or services that had yet to fully materialize. The profits were impressive at first, but then came the crash, and all the king’s men couldn’t put Humpty Dumpty together again.

In the midst of the venture capital unicorn bubble, the IoT hype cycle began. Some of those unicorns, their backers, and several legacy businesses became overly optimistic about mass adoption of edge devices, despite growing challenges around security and fragmentation. I vividly recall going into my first meeting with my supervisor, proposing to research and perhaps build an IoT product or service. The hype had gotten to me, but thanks to his guidance, I was steered in a different direction—something I’m grateful for today. That decision helped me escape the bubble and look at the space more objectively and from a different perspective.
This trend is still ongoing and, although some winners have emerged, this is one hype cycle that I truly believe will collaborate with AI to deliver on its promises—or at least come close.

What more can be said about the cannabis stock bubble, brief as it was, riding the global wave toward legalizing marijuana cultivation and sale? Prices surged far beyond actual inventory, and stock markets speculated well ahead of the real revenue and profit generated by operational companies.

Some of those companies also became entangled in the venture capital unicorn bubble, along with new startups entering the space and making promises they simply could not fulfill with the resources available. The issue was not a lack of resources but the reality that market forces were not ready for what they were offering—yet their boardroom executives ignored the obvious.

At this point, one has to wonder: have we learned anything, or are we doomed to repeat the pattern? The existence of even more bubbles and hype cycles suggests the lesson has yet to truly sink in.