Premium: This Is Worse Than The Dot Com Bubble

Source: Where’s Your Ed At Date: 2026-01-16 URL: https://www.wheresyoured.at/dot-com-bubble/

Summary

Ed argues the current AI investment cycle is worse than the dot-com bubble: larger investments ($168B into AI startups in 2025 alone), more fundamentally broken economics (negative margins that worsen as customer base grows), and venture capitalists who’ve abandoned meaningful due diligence entirely. Evidence includes Lenovo renting entire venues to demo “a fucking chatbot” while media uncritically amplifies claims with no demand for proof of value. The dot-com bubble at least produced durable infrastructure; this one is producing subscription chatbots with no viable unit economics.

Implications

• AI financial sustainability. “Negative margins that get worse as the customer base grows” is the structural doom — unlike normal businesses where scale improves unit economics, AI inference costs scale with usage. The $168B 2025 figure with that cost structure is the math that makes this worse than dot-com.
• Capital markets. VC abandonment of due diligence means the correction, when it comes, will be broader than the companies directly involved — it will implicate the entire investment ecosystem that funded the hype without requiring evidence.
• Vendor BS detection. Lenovo renting venues for chatbot demos while media amplifies uncritically is the mechanism: the hype cycle requires journalists who don’t ask “but does it work” and events designed to generate coverage rather than demonstrate value.