This is why so many traditional bubble comparisons fail. Previous infrastructure booms were notorious for building far more capacity than anyone could use. Railroads were laid before freight existed. Housing developments sat empty. Telecom companies ran miles of dark fiber with nothing flowing through it. AI is the opposite. The world cannot get enough compute or power. … Carlota Perez, the economist whose work on technological revolutions and financial cycles is considered definitive in innovation studies, has shown that every major technological era begins with an investment bubble. The bubble finances the infrastructure, the crash resets the logic, and the infrastructure becomes the foundation of the next era.
4000 words to contradict himself. AI is most definitely in a bubble. No amount of juicy photons or electrical grid upgrades is going to solve the problem that scaling LLM will hit a diminishing return and prices will collapse. Training new models is expensive. Leveraging existing ones? Pennies.
Quote Citation: Jason Snyder, “The AI Bubble That Isn’t There”, 2025-11-17, https://www.forbes.com/sites/jasonsnyder/2025/11/17/the-ai-bubble-that-isnt-there/