AI Boom Is Ending - The Truth Behind the Hype No One Wants to Admit

AI Bubble & Nvidia; Big Tech, GDP, and the Fragile US Economy

Is AI the New Dot-Com Bubble—or Something Much Bigger?

Is artificial intelligence the new dot-com bubble? Recently, I uploaded two videos (available here and here) in which I walked through the soaring, surreal valuations and the $1.5 trillion debt bubble hanging over the big tech industry. Needless to say, today’s AI mania looks eerily familiar. The mood feels like 1999 all over again: the breathless optimism, the stampede of capital, the sense that a new technological frontier has already been chosen and anyone who hesitates will be forgotten.

The numbers alone are surreal. OpenAI has raised nearly $63 billion since 2015. Anthropic—founded in 2021—has taken in roughly $27 billion. To put these numbers in perspective, SpaceX, one of the most audacious engineering projects in human history, spent two decades raising $12 billion. And now OpenAI’s valuation has overtaken SpaceX’s.

That fear reached a bizarre peak when Oracle missed earnings…and its stock surged 36% in a single day simply because executives predicted $144 billion in future AI-powered cloud revenue. One mention of AI added a quarter-trillion dollars to its market cap. As a former Big 4 auditor who worked with Fortune 100 clients, I can easily say that an executive “forecast” may not be worth much, especially in an industry that is fairly new and extremely unpredictable.

Even Sam Altman has warned: “Are investors overexcited? My opinion is yes.”

The New “.com”

We’ve been here before. During the dot-com boom, companies added “.com” to their names and watched their valuations explode—even without working business models. The same thing happened during the crypto bubble when firms slapped “blockchain” on their branding.

Today’s magic word is “AI.” Add it to a pitch deck, and suddenly investors stop asking questions as new investments pour in.

Why This Bubble Is Different

Yet drawing a perfect parallel to 1999 would be a mistake. The foundations underneath the hype have changed.

In the 1990s, start-ups were run by students in garages. Today’s biggest AI models are backed by trillion-dollar empires—Google, Amazon, Microsoft—companies with global reach and political influence. They don’t need to dream of mass adoption; they can manufacture it.

Meanwhile, governments are no longer neutral observers. They view AI as a geopolitical race. That means subsidies, contracts, tax breaks, and preferential treatment. When the state wants you to win, the market ceases to be free—it becomes engineered. And that makes this boom fundamentally different from the dot-com era.

Still, markets don’t stay irrational forever. AI is here to stay, but the industry around it is absolutely in bubble territory. Many of the apps soaring today will disappear tomorrow. The winners will be few—but unimaginably powerful.

The Coming AI Debt Wave

In my recent video, I argued that the AI bubble will burst—but in a form far different from the dot-com crash. Big Tech—once defined by cash-rich balance sheets—is now issuing massive amounts of debt to fund AI expansion:

• Alphabet raised $17B in the U.S. and another €6.5B in Europe.

• Meta issued a staggering $30B, with a record-shattering $125B orderbook.

• Oracle sold $18B to fuel its data-center buildout.

According to Morgan Stanley, AI ambitions could require $1.5 trillion in new tech-sector debt by 2028. JPMorgan estimates hyperscalers will spend $570 billion in 2026 alone—four times what they invested just a few years ago.

A flood that size doesn’t enter the bond market quietly. Analysts warn of “supply indigestion”—too many bonds chasing too few buyers, pushing spreads wider across the entire credit spectrum. And it’s not just giants issuing debt. Lower-rated borrowers—from small cloud providers to former bitcoin miners rebranding as “AI hosting companies”—are piling in. Many depend on aggressive revenue assumptions. The question is whether markets can absorb this much lower-quality supply tied to a sector with uncertain long-term economics.

Here’s the overlooked problem: 95% of organizations using generative AI report zero meaningful ROI, according to one MIT initiative. Companies are building the data centers—but no one knows if they’ll ever pay for themselves. Derivatives tied to potential tech defaults are already rising, which indicates that investors are hedging against financial risks. Because when trillions in new debt meet rising interest rates, even the strongest balance sheets can strain.

Big Tech’s debt binge is reshaping credit markets. And the world has never seen anything like it.

The AI Gold Rush: Why Nvidia Wins Even If the Bubble Bursts

The current surge in artificial intelligence investment has triggered a wave of enthusiasm reminiscent of past technology manias, but as we discussed above, there is a fragile and potentially dangerous imbalance. The AI bubble is not only real but accelerating—and at the center of it stands Nvidia, the company producing the chips that power virtually every major AI model. While prospectors—start-ups, corporations, investors—hope to strike digital gold, Nvidia profits regardless of who succeeds or fails. This unique position makes it one of the few genuine winners in a landscape defined largely by hype.

Meanwhile, Big Tech’s dominance in global markets has grown even more pronounced. The so-called “Magnificent Seven”—Microsoft, Apple, Amazon, Nvidia, Alphabet, Meta, and Tesla—now steer the majority of stock market gains. Their influence is rooted in the belief that AI will revolutionize cloud computing, search, advertising, and consumer technology. Yet this dominance rests on shaky foundations. Much of the growth comes from financial engineering, inflated valuations, and speculative bets, rather than sustained improvements in underlying productivity or economic output.

This disconnect becomes even clearer when comparing stock-market exuberance with the real U.S. economy. While AI-related valuations soar to historic highs, I frequently discuss in my videos that GDP growth, employment trends, and industrial output do not reflect similar strength. The divergence raises the possibility that the stock rally is decoupled from reality—setting the stage for a painful correction if expectations collapse. Adding to these concerns, many AI pilot programs across industries are failing to generate measurable returns. This fuels deeper doubts about whether the billions being poured into AI infrastructure will translate into durable economic value.

This is not merely a tech stock bubble; it may represent a systemic risk to the broader economy. Because Big Tech is deeply entwined with financial markets—through credit markets, indexes, and institutional portfolios—a crash in AI valuations could ripple far beyond Silicon Valley. Such a downturn could weaken credit markets, constrain investment, and exacerbate economic inequality as wealth continues to concentrate in a narrow elite.

AI may indeed reshape entire industries, but the current phase of frenzied speculation resembles past bubbles more than a stable technological revolution. Policymakers, investors, and the public must approach the AI boom with caution, recognizing that the real test will be whether these massive investments produce lasting economic returns—or whether the world is marching toward another painful correction.

So, Is AI the New Dot-Com Bubble?

The answer is both yes and no. Yes, the hype is enormous. Yes, investors are chasing dreams. Yes, many AI companies are overvalued and underbuilt. But no, this is not the dot-com bubble. The geopolitical stakes, the corporate dominance, and the sheer power behind the technology make this boom categorically different. The bubble may pop, but AI isn’t going anywhere. When the dust settles, the winners will be fewer—but extraordinarily powerful. The only question is how big the correction will be.