COVID grease fire GenAI hype cycle = déjà vu
The COVID bubble was a sudden accelerant — free money, no diligence, insane valuations.
The GenAI hype is the accelerant’s sequel — this time with GPUs instead of government checks.
The parallels to the dot-com era are uncanny:
Dot-com 1999 → Raise big, fast, because “the Internet changes everything.”
GenAI 2023 → Raise big, fast, because “LLMs change everything.”
Both cycles sucked in huge amounts of capital with famously thin diligence. Both created frothy valuations far ahead of adoption curves. And in both, most of the winners will look nothing like the companies that raised the biggest rounds.
The dangerous overlap right now?
COVID money extended the life of companies that should have shut down earlier… just long enough for them to pivot to “we’re an AI company now” to chase the next capital wave.
The survivors in Q4 2025 won’t be “AI companies.”
They’ll be real businesses that:
Use AI to solve real, painful, paid problems.
Fit into workflows customers already use.
Don’t need GPUs or hype to stay alive.
The dot-com bust didn’t kill the internet — it cleared the way for companies that could actually execute.
The AI bust will do the same.