The 4 Things You Need for a Tech Bubble

3 hours ago7 min read

Let's cut through the noise. When Brian Merchant dissects whether AI fits the classic signs of an economic bubble on his show Uncanny Valley, he's tapping into a framework every serious investor should have tattooed on their brain.We've seen this movie before, and it doesn't end well for the bag-holders. The four things you need? Irrational exuberance, a compelling narrative of a 'new paradigm,' a flood of dumb money chasing hype, and a complete detachment from fundamental value.Sound familiar? It should. This is the same script that played out during the dot-com bust, the housing crisis, and every tulip mania in between.Look at the AI landscape right now: startups with zero revenue and a fancy ChatGPT wrapper are landing billion-dollar valuations. Venture capitalists are throwing cash at anything with 'AI' in the pitch deck, terrified of missing the next Google.The narrative is intoxicating—this isn't just another app, it's the dawn of a new species of intelligence that will reshape humanity itself. It's a story so powerful it suspends all critical judgment.But here's the hard truth the crypto maximalists already know: value must be rooted in something real. For Bitcoin, it's provable scarcity and a decentralized network.For AI? Right now, it's largely vaporware, massive compute costs, and a mountain of legal questions about training data and copyright infringement. The GPU arms race feels eerily similar to the ASIC wars, where the hardware manufacturers became the only surefire winners.When the music stops, and the cost of capital rises, the companies built on sand will collapse. The smart money isn't just betting on the technology; it's betting on being able to exit before the pop.This isn't pessimism; it's pattern recognition. The bubble might inflate for another year, maybe two, creating paper billionaires and a lot of noise.But when it bursts, and it will, the real builders—the ones creating actual utility and sustainable business models—will be the ones left standing. Everyone else is just fuel for the fire.

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