From boom to burst, the AI bubble is only heading in one direction | John Naughton

No one should be surprised that artificial intelligence is following a well-worn and entirely predictable financial arc

Are we really in an AI bubble," asked a reader of last month's column about the apparently unstoppable rise of Nvidia, and how would we know?" Good question, so I asked an AI about it and was pointed to Investopedia, which is written by humans who know about this stuff. It told me that a bubble goes through five stages - rather as Elisabeth Kubler-Ross said people do with grief. For investment bubbles, the five stages are displacement, boom, euphoria, profit-taking and panic. So let's see how this maps on to our experience so far with AI.

First, displacement. That's easy: it was ChatGPT wot dunnit. When it appeared on 30 November 2022, the world went, well, apeshit. So, everybody realised, this was what all the muttering surrounding AI was about! And people were bewitched by the discovery that you could converse with a machine and it would talk (well, write) back to you in coherent sentences. It was like the moment in the spring of 1993 when people saw Mosaic, the first proper web browser, and suddenly the penny dropped: so this was what that internet" thingy was for. And then Netscape had its initial public offering in August 1995, when the stock went stratospheric and the first internet bubble started to inflate.