AI and The Dot Com Crash

These two things can be true at the same time:

• AI is a world changing technological innovation that will ultimately live up to its hype; and
• AI is an utterly overblown technology that will fail to live up to its hype, leaving millions in financial ruin along the way.

After all, those two statements pretty much sum up the World Wide Web from the period between roughly 1996 and 2006. At the moment, it feels to me if we’re crossing the peak of AI’s hype cycle, and about to enter “the trough of disillusionment,” a period where a vaunted technology fails to live up to its early promises.

We’ve seen this before, but never with the impact of the AI hype cycle. As many have pointed out (read this great Atlantic piece for more), it’s more than likely that economic historians will point to the past few years as the most extraordinary injection of “private stimulus” in the history of capital markets. In fact, it may well be masking the economic impact of the Trump tariffs…at least for now. When it ends, the crash may well also be historic.

So my question — and this is a serious one, as I am not a professional investor — is this: How does one hedge that kind of a crash? Because at some point, one would think that reason will return to markets, and companies like OpenAI will not be able to get away with headlines like this one:

Tell me I’m wrong?

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