Last month Elon Musk’s SpaceX listed on the Nasdaq at close to a US$2 trillion ($3.5m) valuation, making it the biggest IPO in history – and making Musk the world’s first trillionaire.
SpaceX, OpenAI and Anthropic are not your typical speculative start-ups.
These are extraordinary businesses, or at least extraordinary stories.
SpaceX has changed the economics of space.
OpenAI and Anthropic are building tools that are already changing how knowledge workers operate.
They are not Pets.com with a better pitch deck.
But that’s exactly what makes this moment so interesting.
In the dotcom era of the late 1990s, the internet was real too. Amazon listed in 1997, eBay listed in 1998. Google came later and became one of the great businesses of the modern economy.
The problem was not the technology. The problem was the price investors were willing to pay for almost anything attached to it.
By 1999 and 2000, the quality of companies coming to market had deteriorated. Investors stopped asking “what is this worth?” and started asking “how do I get in?” That is usually when discipline starts to disappear.
AI doesn’t yet feel like late-1999 to me, but things are moving quickly. The major technology companies are spending enormous sums on AI infrastructure, and they’re doing so because they can see demand. Businesses are using AI. Productivity is improving in parts of the economy. Revenues are real.
Still, there are warning signs.
When private companies come to market at huge valuations, the IPO price matters. A great company can still be a poor investment if you pay too much. Some AI infrastructure will be overbuilt. Some start-ups will never justify the valuations currently being whispered around them. Some investors will discover that owning the future is not the same as making money from it.
That’s the lesson of every technology boom. The winners can be enormous, but they’re rarely obvious at the price everyone wants to pay.
For investors, the question is not simply: “Is AI a bubble?” It is more useful to ask: “Where in the cycle are we, and what am I being asked to pay?”
My view is that AI remains one of the most important investment themes of our lifetime.
But the next wave may require more caution, not less.
The easy money in a theme is often made before everyone agrees it is the future. We are now past that.
The technology is real. The opportunity is real. So is the risk.
When it comes to bubbles, timing matters.