In the mid and late 1990’s, the internet was the latest craze. Never in history had it been possible for companies to create their own digital page, called a website, for people around the globe to see. Images could be sent across the globe in a fraction of a second, and entrepreneurs were rushing to create their own dot-com startups, with venture capital on fire and growth valuations skyrocketing.
Shortly after the turn of the century, when fears of the Y2K apocalypse turned out to be misplaced (the new apocalypse wouldn’t be until 2012), the NASDAQ composite stock market rose by 600%. Investor excitement was through the roof. Humanity had entered a new era where people could buy things while sitting on their own couch, and the invisible (and magical) hand of capitalism seemed to have grown wings, turning average individuals into wealthy entrepreneurs.
And then it happened. In October 2002, the NASDAQ composite index fell 78% from its peak, losing all its gains. The bubble of excitement and overconfidence in the future of the internet had exploded. Reality had sunk its teeth into the stock market and ripped out a nice chunk.
The markets would eventually rebound, and even though the situation led many to believe the internet was overvalued, it would eventually become an integral part of business and basically the bloodline of civilization today, no less imperative than the need for electricity to power our everyday lives.
A new technology like no other in human history
Fast forward two and a half decades and here we are again, except this time amidst the emergence of a technological advancement that threatens to upend the very fabric of modern civilization in unimaginable ways. Artificial intelligence is quickly becoming so much more than just a tool, it may soon become so advanced it will seem like a living, breathing, conscious entity.
Although that may not be the case as of yet, countless companies that offer AI platforms for other companies have sprung up, offering to do all their marketing dirty work for them. I, as a business owner myself, have adopted one of these systems with the goal of efficiently “reaching out” to as many potential clients as possible, and just about every day I get bombarded with offers for the same exact service, a blitzkrieg of LinkedIn and email messages going in all directions, not a single one of them written by an actual person.
Meanwhile, results from the promise that “we’ll get you XX amount of clients in XX amount of time” have been mixed, with our company’s personal experience not exactly hitting the promised mark, not even close.
A digital gold rush like no other
Despite all the economic headwinds resulting from newly erected trade barriers, global conflicts and financial uncertainty, the US stock market has been hitting record highs.
How is this possible?
The main reason: AI enthusiasm. According to Investopedia, “most of the best-performing stocks in the S&P 500 this year are directly tied to the AI boom. Data storage companies Seagate Technology (STX) and Western Digital (WDC) have seen their shares nearly triple in value this year, while Palantir (PLTR) and Applovin (APP), two software firms that have excelled at translating AI capabilities into revenue, have more than doubled.”
According to Stanford University Human-Centered Artificial Intelligence, in 2024, corporate AI investment reached $252.3 billion. Private investment climbed 44.5% and mergers and acquisitions went up 12.1% from 2023.
A looming explosion?
Is the current AI investment boom overhyped, at least in a similar way to how many dot-com startups were overvalued just before the turn of the century? Well, to put things into perspective, less than two weeks ago the Financial Times explained how just 10 AI startups have gained just under 1 trillion dollars in market value in just one year.
Keep in mind that none of these startups have -as of yet- earned a single dollar in profit.
If this isn’t concerning enough, earlier this month, as reported by CNN, a researcher and partner at the UK firm MacroStrategy Partnership, named Julien Garran, announced that we are currently in “the biggest and most dangerous bubble the world has ever seen”. Garran went on to claim that the current AI madness is “17 times bigger than the dot-com bubble and four times bigger than the 2008 real-estate bubble.”
If the bubble is that big, how wet will everyone get when it bursts?
At this point, it’s hard to tell. Regardless, we can probably expect AI to be an integral part of our lives for as long as human civilization remains intact. Unless, of course, it gets smart enough to take full control of the steering wheel and pushes us to the sidelines.
So, as amazing an investment opportunity AI appears to be, either in the stock market or for making our own business more efficient, perhaps we should think twice before collectively selling our souls to a machine so it can do just about everything for us, including sending simple emails and LinkedIn messages to other people.
Stratik’s Strategy
The objective of this article is not to undermine the potential of AI for the best. In fact, this technology may very well end up doing wonderful things for humanity and for the planet, like creating innovative ways to address climate change, among others.
As mentioned above, those of us at Stratik have been implementing AI systems to streamline many of our processes, as have many companies today. A decent percentage of our articles are also written by ChatGPT, with the exception of this one (I figured it would be insulting to our own humanity to have artificial intelligence write an article highlighting the potential for economic catastrophe as a result of overvalued artificial intelligence).
Nevertheless, I’d like to end this article by stating that as useful as AI can be for certain aspects of everyday life, we’ve learned that some essential parts of business, like the human “touch” when reaching out to another human being, can never be overvalued… because it’s priceless.
If you’d like to have a chat, feel free to contact us at info@stratik.us. Just don’t try to sell us the latest AI platform promising to get us more clients by reaching out to them.
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