Technology: Could Be Real, Could Be a Bubble, or Maybe Both

When it comes to innovative technologies, debates follow, splitting people into those who see breakthroughs and those who see bubbles :)

Beyond discussing the reality, applicability, and sustainability of these new technologies, the economic value they create and the return on investment have always been contentious topics, especially in their early days. One of the biggest mistakes believers in technology often make is:

“This technology is real, so it can’t be a bubble.”

As if these two couldn’t coexist. But history has shown us time and again that they can.

The internet changed our lives completely, and that’s not something anyone can deny or debate.

Yet, back in the late ’90s, when the internet was more of an idea than a reality in our lives, shares of any tech company developing internet-related products were snapped up with a frenzy akin to a gold rush, driving prices exponentially higher. Within just a few years, Nasdaq fell by 78%. Pets.com went under, and only Amazon and a few others survived. The issue wasn’t the reality of the technology.

Take Cisco, for example: one of the world’s largest tech companies, still forming a big part of the backbone of internet infrastructure today. Yet, Cisco never reached its record highs from that era again.

In the end, internet technology won, entered our lives, and transformed them fundamentally; but the vast majority of early investors lost out.

JP Morgan CEO Jamie Dimon put it this way in a BBC interview: “AI is real and will pay off. Just like cars and televisions did; but most of those involved in the early days didn’t see good results.”

The reality of a technology doesn’t guarantee investment returns. A technology can be real and still create an economic bubble at the same time. The dotcom era made that very clear.

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There were many differing opinions about blockchain technology as well. Since 2017, I’ve been involved in this ecosystem in one way or another, either as a hobby or professionally. There were those who believed it would fundamentally change the unhealthy global financial system, and others who said, “It’s speculative, unregulated, with no real use.”

But at the end of this journey, it seems the era of NFT frenzy and the astronomical prices seen then, the DeFi summer and the 100x, even 1000x gains, and the virtual lands bought in the metaverse that valued higher than real ones, are over.

During this period, independent of the technology, many speculative projects, or companies that never intended to deliver on their promises, reached massive financial valuations and then vanished overnight.

Yet in the end, Bitcoin and a few major networks or projects are still standing today. Beyond that, blockchain technology itself remains. The world’s largest financial institutions are integrating their infrastructures into this system, and real use cases are slowly forming and settling in. But most of the grand promises that came with this technology haven’t materialized. Economically speaking, few early investors saw returns, though some certainly did. But much of the economic value that emerged during this process was indeed a bubble and rewarded very few of its initial investors.

Now we have to ask the same question for AI. Nobody disputes that the technology is real, even groundbreaking. But when you look at the numbers, there’s something unsettling.

Research from MIT Media Lab and McKinsey’s 2025 State of AI report point to a shared finding:

About 95% of corporate AI investments aren’t producing measurable returns.

OpenAI made around $13 billion in revenue by 2025, but burned through about $9 billion in the process. According to the company’s own projections, operating losses could reach $74 billion by 2028; profitability seems pushed to 2030.

According to JP Morgan Asset Management, since ChatGPT launched in November 2022, 80% of S&P 500 gains and 90% of capital expenditures have come from AI stocks. This intensity might even surpass the dotcom era.

In an October 2025 Bank of America survey, 54% of global fund managers said AI stocks were in bubble territory. While I never believe such comments and surveys are indicators on their own and know they can be wrong, when combined with other data, they do make you stop and think.

I think we’re in a slightly different situation than the dotcom era. Back then, yes, big players invested too; but never at today’s levels. Today’s big players, the major investors in large AI companies, are doing this not with debt but from their own coffers.

Two different situations come into play here.

First, the “prisoner’s dilemma.” As Google CEO Sundar Pichai put it: “The risk of under-investing is much greater than the risk of over-investing.”

Everyone is aware of the risk, but nobody dares not to invest and miss being among the early players in this major development.

On the other hand, since the emergence of the internet and the subsequent rise of tech giants (Google, Meta, etc.), new technologies, projects, and the macro economy in general have grown with the value these giants have generated and given back to the economy. Of course, there’s the manufacturing sector too, but thanks to the employees, suppliers, and investments in new technologies or ideas by tech giants, the technology sector globally occupies an incredible space compared to what would be considered a short time in world history.

Or should we say? “It did.”

Because in recent years, these giants are spending or investing almost all their cash flow on AI. The economic value generated by the tech world has been flowing here alone for a few years. If your idea, project, or company isn’t related to AI or adapting to it, staying afloat seems nearly impossible.

This situation is completely changing the financial dynamics of the still very young tech world.

So does AI face an end similar to dotcom or the metaverse? Or will there be a parallel between the economic value AI is producing/will produce and the investments being made today? Will developments in AI mean that technology companies no longer need thousands of employees? Will AI do all the work currently done by white-collar workers, and will the contribution to the global economy through these employees disappear along with technology investments? What kind of order awaits us within these brand-new dynamics?

It’s early to say. The most used phrase in such periods has always been “But this time it’s different.” In the end, technology actually survives. But not everyone involved, whether early investors or later ones, wins. And this time, it’s not just the end user or personal investor who might not win; the biggest players in the global economy are taking very big risks even for themselves.

As I ask these questions, what Erman Taylan wrote in Soft Commitment last week both inspired me and added another dimension to this discussion:

Society’s view of AI. 44% of Gen Z say they’ve sabotaged their company’s AI strategy at least once. The AI-focused high school planned to open in New York was shelved due to reactions from parents, teachers, and students. Movements like QuitGPT are multiplying.

Even if the economic bubble doesn’t burst, could part of society reject this transformation? While social media regulations and bans are being debated today, the voices of those wanting to take early action against AI might grow louder. This is another, and perhaps as important as the economic aspect, question.

Is it too early to ask these questions? Most likely. But it might even be late not to ask them.

Sources:

Jamie Dimon, BBC interview: https://finance.yahoo.com/news/worlds-top-banker-says-ai-141757662.html

MIT Media Lab 95% zero ROI: https://thefinancialbrand.com/news/artificial-intelligence-banking/why-95-of-enterprises-are-getting-zero-return-on-ai-investment-191950

McKinsey 2025 State of AI report: https://thenextweb.com/news/mckinsey-ai-productivity-paradox-enterprise-roi-capex

OpenAI revenue/loss, Fortune/WSJ: https://fortune.com/2025/11/12/openai-cash-burn-rate-annual-losses-2028-profitable-2030-financial-documents/

JP Morgan Asset Management, 80% S&P 500 gains: https://www.institutionalinvestor.com/article/jp-morgans-michael-cembalest-bubble-or-not-ai-starting-transform-industries

Bank of America, 54% fund manager survey, October 2025: https://www.bloomberg.com/news/articles/2025-10-14/most-investors-say-ai-stocks-are-in-a-bubble-bofa-poll-shows