The AI Boom Is Starting to Look a Lot Like the Dot-Com Burst, But Worse

The AI gravy train is chugging along at breakneck speeds. Every day, appliances are getting crammed with AI for reasons no one can fully explain, even though consumers actively hate it. AI is driving people with mental illnesses into unsafe situations and acting as the worst kind of enabler for people who suffer from grandiose delusions.

When college students aren’t using it to cheat their way into degrees, they’re complaining that AI has rendered their degrees useless. Meanwhile, the biggest American companies profiting off the boom, like Nvidia, Microsoft, Apple, Amazon, Meta, and Alphabet, are rolling in the dough with stock prices at or near all-time highs.

AI has quickly altered every aspect of our world, and if one economist turns out to be correct, it all might come crashing down soon.

Torsten Slok, chief economist at Apollo Global Management, is a tad bit concerned. He’s warning of an impending bubble burst that will seem like a replay of the not-too-distant past. Slok says the top dogs of today’s S&P 500 are, thanks to AI, more overvalued now than companies were before the dot-com implosion in the late ‘90s.

At the heart of Slok’s concern is the dangerously high price-to-earnings (P/E) ratio of these companies. These metrics are supposed to reflect how much a stock is worth versus how much its company actually earns. Right now, the P/E ratios for the AI elite are climbing, rapidly, explosively, and all higher than during dot-com mania.

AI hype has kicked off an arms race, with companies dumping tens of billions into data centers, GPUs, and talent. Nvidia is practically single-handedly propping up the S&P 500 index. All this is happening while DeepSeek, a Chinese AI startup, recently showed off a chatbot that performed as well as some of its Western counterparts but at a fraction of the cost, sparking a panicked market selloff.

It’s a mad dash to a finish line no one has clearly defined. There is no endgame here other than millions of Americans losing their jobs as they’re replaced with AI.

There is no moon landing moment for AI that we’ll all be able to immediately understand as a true landmark achievement. At the current moment, it just feels like a handful of companies using up a lot of investment money on hazy, ill-defined promises that may not pay off. And if they don’t, it may take the entire market down with them.