How To Navigate the AI Bubble

Let me be clear- while I’m all-in on AI, Generative AI, Machine Learning, LLMs and like technologies, I’m also not one of the voices that is completely consumed with AI in its current format. I know it has its limitations, just like anything else created by humans. I sincerely believe AI will make a lot of money for a few people, then eventually a normal amount of money for a lot of people as the technology is continually democratized and the adaptation curve flattens.

It would be tough to call AI a “bubble” in a traditional sense, as many of the new major players in the technology are not publicly traded companies, and it takes a massive amount of investment to become a major player. The major players are already the old stalwarts of the technology scene, so to speak- Microsoft, Nvidia, Amazon, Tesla, and Alphabet. There is no here.

However, there is definitely a technology hype bubble occurring with AI today, and it should be addressed.

The Hype Bubble

Like a young man placed in a leadership position for the first time, technology hype Bubbles tend to inflate themselves, then slowly deflate and find their place when supply and demand level out. As noted in a recent Wall Street Journal article by James Mackintosh (“Nowhere For Investors to Hide From the AI Hype”) Let’s not forget more recent mini-bubbles such as the bubbles surrounding renewables, cryptocurrency, cannabis-related equities, 3-D printing and SPACS. While these innovation certainly have their place in the world today and will continue to be important in the world of the near-future, the hype never matched the outcome. Only the hysteria and hype cycle of the dot-com bubble could match the eventual positive effect of the technology.

AI itself has experienced several bubbles that tend to be motivated by a mix of fear and wonder, and appear when some dynamic use case emerges that shows “wow, computers are more talented (in some things) than the smartest humans, then fade away when the use cases of the technology stop being as interesting or are exhausted, or simply when people remember that at the end of the day, we like people and the flavor they bring to our lives. This is why IBM’s Watson's chess victories in the late 90s were shocking enough for a time to cause IBM’s stocks to explode (then fall), but is also why Magnus Carlsen is a household name and there’s a movie called The Queens Gambit, but as far as I know, a movie called “Deep Blue” isn’t in production yet.

How Can My Business Navigate the AI Bubble?

This leads to questions such as "So...How Can We Navigate the AI Bubble As A Business?" "How can we ensure that we invest enough, but not enough to overleverage ourselves?".

If you're asking questions such as these, then reach out to us at We'll work with you personally to create answers for your company - not more problems.

-Mychael R. Diaz, Miami Business Consulting

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