- Examining parallels between the dot-com boom and the burgeoning AI industry, focusing on the impact of 'Fear of Missing Out' among investors. Discussing expert views on potential repercussions, including market strategist Julian Emanuel's insight and NVIDIA's case as a leading AI industry player.
The fascination gripping industries with AI applications echoes the fervor and heady exuberance that defined the late 90s and early 2000s dot-com era. Both eras are strikingly marked by the concept of "Fear of Missing Out" (FOMO)—an investors' sentiment primarily driven by the tantalizing prospects of extraordinary returns, albeit riddled with risk.
In the height of the dot-com phenomenon, the predominant emotion was a seemingly unrestricted zeal for internet-based businesses, an atmosphere evocative of Montagu Norman's 'Deus ex machina'— a potentially miraculous solution to seemingly insurmountable obstacles. With investors tantalized by the groundbreaking potential, the internet was touted as the future of business. This sense of intrigue echoes with today's near-obsession with AI technologies. However, in both scenarios, the prospects of staggering, quick profits often eclipsed the risk inherent in unstable business models, resulting in the notorious dot-com burst.
The interesting glimpse into the Efficient Market Hypothesis offers insights into how false information or significant lack of critical intelligence regarding business models and stability contrasted sharply with actual company value, thereby inflating the markets into a bubble on the brink of bursting.
Comments