Part 4: TECH BUBBLES & HYPE CYCLES

Market Speculative Exuberance from the Late 1990s to Present

Dec 01, 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 parts 1, 2 & 3 for previous opinion pieces

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

AI is the buzzword that launched this entire series. Companies, organizations, government bodies, and virtually everyone in the industry wants to see AI in headlines, valuations, earnings calls, proposals, and beyond. This trend is marked by skyrocketing valuations for AI infrastructure and foundational model companies, fueled by massive corporate excitement and enormous market investments.

The Mag-7—the top seven companies on the S&P—have taken the lead since OpenAI released its GPT models and introduced the world to ChatGPT. Other countries, especially China’s software industry, have also joined the race, releasing a flood of AI-powered tools.

The challenges, politics, and strategies driving this bubble are still evolving. While no one can predict the future, the trend is unmistakable: we are in an AI bubble, and the true winners have yet to emerge.
What happens if the bubble bursts? Experts are grappling with this question on podcasts, in newsrooms, boardrooms, and on trading floors. One thing is certain—this bubble represents the convergence of technologies that have shaped our world since the internet. It is the pursuit of the holy grail of computing: artificial general intelligence (AGI). Those who control the datacenters and have widely adopted models will shape the next wave.

What will be the next bubble? There is a technology simmering in the shadows of the AI trend: quantum computing. When AI can break encryption before your lunch break, the demand for stronger encryption and more robust web foundations will surge, and quantum computing will step into the spotlight.

This is my speculation—not gospel—but the trend is clear. We are at the melting point for a new digital world.

Conclusion

Since we are in an AI bubble and the leaders have not yet emerged, investors should conduct thorough due diligence before committing to any company and be prepared to withdraw their resources if the business landscape becomes unclear. The promise of AI is real, but so are the risks of overhyped valuations and speculative frenzy.