When will the GenAI bubble burst?
We have the definitive answer. But a quick counter-question first, “when did you last use a dot com”? You are using one right now!
When the dot com bubble burst in 2001, everyone and their uncles suddenly became an expert proclaiming the doom and end of the internet, e-commerce, and all things dot.com. More than 2 decades after that, not only has it not ended, but dot com is also more ubiquitous today than it has ever been. A bubble is a valuation problem and often marked by a victory of greed over common sense. Bubbles froth, bubbles burst – it is unfortunate, but such is the nature of human behavior and financial markets.
And thus, our definitive answer to the question, “when will the GenAI bubble burst” is:
Quick answer, “who cares?”
Short answer, “whenever it does, smarter firms in the space, with the right focus on problem solving and intellectual capital, will continue to thrive and grow 10X”
Long answer:
Back in the late 90s when I was a high school student and later starting college, many of my seniors were en masse moving to United States. The dot com and Y2K boom required hundreds of thousands of young quantitative minded graduates (not necessarily with computer science degrees) to support the growing industry. Then, somewhat suddenly in 2001, the dot com bubble burst! It is still taught in economic history as one of those key periods of time where the bursting of the bubble took the largest economy of the world (USA) into recession, along with some of the fastest growing markets like Japan (which took decades to recover its valuation to its peak).
The dotcom bubble burst, but does that mean that we do not use dot coms today? Did it mark the end of the idea of a web page? Did the bubble destroy companies with a great sustainable idea or a laser focus on its products? Amazon’s market cap at the end of 1999 (at peak) was 30 billion, after the bubble burst (at minimum) it was 2.5 billion, and today it is 2200 billion!
Don’t get me wrong, there will be winners and losers, there will jobs lost and gained, there might be new challengers destroying incumbents. But, the GenAI is out of the bottle and while it will stop seeming like a magic bullet to solve all our problems, it can solve some targeted problems well, it will start solving more, and it will be a part of the valuable stream of technologies that will get normalized in our way of life (like dot coms and e-commerce).
So, please stop worrying about the GenAI bubble and figure out where you can use it.
Those who can, do. Those who can’t, teach. And those who can’t even teach become strategy consultants. At dōnō we can, we teach, and we consult. That is what makes us unique.
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