Is AI on the verge of bursting—or maturing?
Are we facing a new technology bubble?
Or will artificial intelligence chart a more sustainable path than the dot-com era?
Since November 2022, the surge in artificial intelligence (AI) has transformed technology markets and fueled enormous expectations among investors and companies.
Yet beyond the figures and headlines, what is truly at stake is how this disruptive wave will reshape the economy and our everyday lives.
Unlike the dot-com bubble of the late 1990s, experts caution that the rise of AI is underpinned by stronger fundamentals and involves fewer speculative risks.
Alison Porter, analyst and portfolio manager at Janus Henderson, states:
“We view AI as the fourth technological wave. Each wave has sequentially connected more people and devices and has required increasingly greater levels of investment.”
Waves vs. technology themes.
Porter distinguishes between technological “themes,” such as 3D printing or electric vehicles—each with relatively limited markets—and technological “waves,” such as AI, which exert a broad, economy-wide impact.
These waves require investment across multiple layers. They range from silicon, computing, and storage to networks, software, devices, energy, and connectivity.
Lessons from the dot-com era.
The collapse of the dot-com sector, by contrast, had a specific trigger: the Y2K effect—the millennium change that forced the replacement of legacy IT systems.
The massive spending driven by this event was combined with speculative investments and accounting fraud. This combination ultimately inflated the bubble artificially.
AI, on the other hand, is developing under more disciplined valuations and with strong financial backing from major technology companies.
Current financing and regulation.
Geopolitical factors and differing capital structures also set the two periods apart.
Porter notes:
Financing through private equity and credit for AI investments has been very robust. Nineteen AI companies have raised USD 65 billion this year, so with this level of private funding available, there is little incentive to go public prematurely—something clearly reflected in today’s initial public offering (IPO) market compared with the Internet era.
WorldCom’s strategies led to aggressive spending on mergers and acquisitions, and the company’s expenditures were a mix of genuine investment and aggressive outlays, but also massive accounting fraud (over USD 11 billion), which other companies of the time attempted to compete with, creating artificially inflated demand.
In the late 1990s and early 2000s, globalization accelerated, driven by landmark trade agreements; by contrast, 2025 has been marked by a shift in trade policy, rising tariffs, and a focus on manufacturing localization as well as data sovereignty.
According to the analyst, these differences suggest that AI is more likely to experience a growth trajectory characterized by ups and downs.
This path would deliver significant returns alongside volatility. It would do so rather than culminating in an abrupt collapse like that of the Internet in 2000.
Porter concludes by clarifying that:
“Despite the parallels with the dot-com era in terms of spending levels and disruption, this wave is more likely to evolve and mature.”
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