AI and the dot-com bubble have similarities but differ in important ways.

AI and the dot-com bubble have similarities but differ in important ways.

The Growing Blockchain Industry: Steady Growth, Distinct from Past Bubbles

The blockchain industry has been witnessing remarkable growth in recent years, comparable to the infamous dot-com bubble and crash of the late 1990s. This growth has sparked both excitement and apprehension, leading to comparisons with the past. However, a closer examination reveals that the trajectory of the blockchain industry, specifically in the field of Artificial Intelligence (AI), has distinct characteristics and is on a different path.

During the dot-com bubble, internet-based companies experienced massive hype and investment, reaching a peak value of $2.95 trillion before crashing to $1.195 trillion. In contrast, the AI market has steadily grown since 2021 and is currently estimated to be around $200 billion, with a projected market size of $1.8 trillion by 2030, according to data from analytics platform Statista1. The market cap of AI has seen consistent growth over the years2. This demonstrates a more sustainable and gradual expansion compared to the volatile rise and subsequent crash of the dot-com bubble.

Henry Nothhaft Jr., an experienced AI industry professional and founder of AI software company Trapit, highlights the similarities between the rapid expansion of AI and the dot-com bubble. Both represent transformative technological innovations that redefine industries and bring about societal changes3. However, Nothhaft acknowledges the inflated expectations associated with AI and the presence of many new entrants in the market, which is reminiscent of the dot-com era4.

While it is too early to determine the extent of these inflated expectations, Nothhaft anticipates that many AI companies created during this hype period will fail, akin to the dot-com bubble. However, he believes that a small number of winners will shape the future of the industry, emphasizing that AI has already demonstrated its value across various sectors, including media, healthcare, finance, transportation, and education5.

The success of OpenAI’s ChatGPT, which quickly gained millions of users upon its launch, exemplifies the potential of AI. Despite recent drops in traffic and competition from other platforms like Bard, Bing, and Character.ai, AI’s tangible value is recognized, and its applications continue to grow6.

AI’s rise and its comparison to the crypto industry are also worth noting. Both have experienced remarkable growth, but AI’s growth is rooted in substantial technological advancements and practical applications, setting it apart from the speculative nature of crypto assets, such as non-fungible tokens (NFTs) and initial coin offerings (ICOs). While NFTs and ICOs represent niche applications of blockchain technology, AI holds the promise of substantial innovation and widespread adoption7.

Sam Huber, CEO of the metaverse platform LandVault, further differentiates the growth of AI from previous tech bubbles. Huber highlights that not all businesses in the AI space have viable business models, drawing a parallel with the dot-com era, when many companies labeled themselves as “internet businesses” simply due to the possession of a website. However, Huber emphasizes that today’s companies can raise capital privately, reducing the impact of market failures and protecting the general public from mass panic8.

In contrast to previous bubbles, AI’s growth is fueled by technological advances and practical utility in multiple industries. Its potential to improve efficiency and transform various sectors, combined with its widespread incorporation into operations and products, reaffirms its distinctiveness from past speculative bubbles9.

Osman Masud, CEO of The Game Company, an independent video game developer utilizing AI, suggests that AI’s maturity and tangible value differentiate it from the dot-com bubble. With AI technologies already proving their practical use in industries like healthcare, finance, and automation, Masud asserts that AI’s growth is driven by advancements in machine learning, deep learning, and neural networks, which continue to evolve and improve. Consequently, the long-term impact and potential of AI are expected to be substantial, leading to further growth in the years to come10.

In conclusion, while the growth of the blockchain industry, particularly in AI, has drawn comparisons to past bubbles like the dot-com era and the crypto market, it exhibits distinct characteristics and prospects. Unlike the speculative nature of previous bubbles, AI’s progress is grounded in substantial technological advancements, tangible applications, and the ability to improve various industries. As AI becomes ubiquitous, it is transforming the digital landscape and demonstrating its potential for long-term growth and impact.


  1. The market cap of AI has seen steady growth since 2021, with forecasts predicting it could reach $1.8 trillion by 2030. Source: Statista↩︎

  2. [Image] The market cap of AI has seen steady growth since 2021, with forecasts predicting it could reach $1.8 trillion by 2030. Source: Statista↩︎

  3. Speaking to Cointelegraph, Henry Nothhaft Jr., who has worked in the AI industry since 2009 in various roles and founded the early AI software company Trapit, said the rapid expansion of AI and the dot-com bubble share some key attributes.↩︎

  4. Nothhaft pointed to the scale of impact on the economy and society in both cases. AI, in particular, has been a polarizing topic, prompting tech leaders like Elon Musk to warn of impending doom while also investing in the sector.↩︎

  5. Although Nothhaft thinks it’s still early to make a call on just how inflated expectations are for AI, he does believe that most of the AI companies created during this hype period will fail and a small number of winners will shape the future of the industry.↩︎

  6. OpenAI’s chatbot ChatGPT launched in November 2022 and quickly became one of the fastest-growing web platforms in history, eclipsing 1 million daily users in just five days and reaching the 100 million monthly users mark by January 2023.↩︎

  7. According to Nothhaft, NFTs and ICOs represent niche applications of blockchain tech, while AI represents substantial technological innovation with wide-ranging, tangible applications.↩︎

  8. According to Huber, AI’s growth is primarily driven by technological advances and practical applications, whereas crypto and related assets, such as NFTs and ICOs, frequently attract speculative investments motivated by the prospect of quick financial gains.↩︎

  9. Huber argues that one of the main differences between other tech bubbles and AI is that it’s supported by tangible applications and use cases, with many companies incorporating AI into their operations and products.↩︎

  10. Overall, Masud believes that the growth of AI is being driven by advancements in machine learning, deep learning, and neural networks, which continue to evolve and improve.↩︎

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