Does AI hype echo the dot-com bubble?
Remember that all too often, history repeats itself
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IN HIS latest letter to shareholders, Warren Buffett said that markets now exhibit far more “casino-like” behaviour. While the stock market has grown, its participants are “neither more emotionally stable nor better taught than when I was in school”, he wrote.
The phrase “casino-like behaviour’’ could also be used to describe the current mania over US tech stocks, particularly in artificial intelligence (AI). Many believe a massive bubble is inflating. Inevitably, parallels are now being drawn with the tech bubble that formed in the 1990s.
At the time, the Nasdaq was in the grip of a technology-led mania. Stocks with no earnings and massively stretched valuations were a “buy’’ simply because they had a “dot-com’’ after their names.
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