Public and private market investors have indiscriminately been attributing huge premiums to AI companies, and the party continues — the music is still playing and people are still dancing. But when the music stops, investors will scramble for assets in a frantic game of musical chairs.
We have seen this all before. As with the dot com bubble, the long-term potential of the technology is massive; the over-valuations are just part of the initial hype. Right now, we’re already slipping into the Trough of Disillusionment and when the AI bubble bursts, the flawed valuations will be exposed.
