AI is very different from the 2000 Dot.com bubble

https://www.nytimes.com/2025/12/09/technology/ai-boom-unlike-dot-com-boom.html

{{ That difference in scale is both alarming and — conversely — a comfort. The wealth and power of these A.I. companies are partly why Jerome H. Powell, the chair of the Federal Reserve, sees no cause for worry. These companies “actually have business models and profits and that kind of thing,” he said in October. “So it’s really a different thing” from the dot-com bubble.

To a large extent, the dot-com boom was a revolution from below. People around the country packed their bags and headed to San Francisco in the hopes of striking it big, just as they did in the original gold rush 150 years before. More than 2,200 dot-com companies went public between 1996 and 2001. At the time, it seemed like a lot. }}

Ai is a revolution brought to you by trillion dollar companies with earning and profits. They’ll survive an AI bubble and downturn.

intercst

3 Likes

But will their overblown stock prices, inflated by bubble psychology and borrowed money, survive the deflation of the bubble when investors realize the profits from AI (if any) won’t justify the capital expenditures for years?

Wendy

1 Like

Probably not. Maybe trillion dollar market cap Tech stocks drop by 50% and the S&P 500 drops by 20%, Hardly the end of capitalism for Long-Term Buy & Hold investors.

Even Berkshire Hathaway is now buying Google.

intercst

If the Mag7 lose 50%, you can be sure the S&P is going to lose more than just 20%.