With the massive boom of AI-driven services and content, some experts are warning that we may soon see a large market correction or similar to the dot-com or internet bubble in the near future.
The dot-com bubble was a period where internet infrastructure and use became massively popularized, in which venture capital companies raised around $256 billion between the bubble forming in 1995 and peaking in March of 2000. With the National Association of Securities Dealers Automated Quotations (NASDAQ) stock exchange index growing from under 1000 in 1995 to over 5000 on March 10, 2000.
Due to disappointing returns and massive stock sell-offs, the NASDAQ Index lost almost 78% of it’s value by Oct. 2002, culminating in the bankruptcy of many internet based companies and catastrophic losses for large companies like Amazon and Ebay.
AI has pretty much clawed its way into almost every aspect of our technological lives whether it be as a search engine, generative content or even as a companion to hold conversations with. There’s no denying that AI has become a huge part in the way we interact with technology.
As of 2025, there are approximately 70,000 AI companies operating according to Ascendix. Venture capital firms backed over 2000 new startups in 2024 alone, which is a 13% increase from 2023 and 70% increase from 2019. According to Crunchbase, an online database used to track markets and funding,in 2024 AI startup companies raised a staggering $89 billion.
According to The United Nations Trade and Development Organization (UNCTAD), AI market share will increase from 7% of the global technology frontiers market with an estimated value of $189 billion in 2023 to about 30% worth an estimated $4.8 trillion in 2033.
Sam Altman, CEO of OpenAI (creators of ChatGPT), said in an interview with The Verge, “When bubbles happen, smart people get overexcited about a kernel of truth. If you look at most of the bubbles in history, like the tech bubble, there was a real thing. Tech was really important … People got overexcited. Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes.”
Matt Calkins, the founder and CEO of Appian, thinks the market isn’t anywhere near as dire. He said on a Yahoo Finance podcast, “Yeah, people are talking about a bubble, but I don’t think there’s a bubble right now. I think when bubbles exist, it’s because the value outstrips the price.But in this case, AI is just as valuable as everybody thinks it is. It just needs to be better applied.” He went on to reference the dot-com bubble with, “You know, back in the 2000 era, there was high valuations with no value underneath. AI is in fact extremely valuable.”
With the massive influx of new AI-focused companies, and immense amount of capital spent behind them, some are obviously destined to fail, but questions remain as to whether the market will have a total collapse like in the early 2000s or steady growth as projected.
