How today's AI boom stacks up to the dotcom bubble

AI stocks are exploding just like internet stocks did in the '90s. Here's what history can teach us.

Transcript

00:00I think the AI-driven rally that we've seen in some ways echoes the dot-com bubble of the late 1990s.

00:07I mean, and that ran for a long time.

00:09I always remember, because it was just before I joined the new firm Greenhill that was a merger and acquisition specialist,

00:16that Alan Greenspan famously said in 1996 that the market was exhibiting some irrational exuberance,

00:22and people thought that was a real sign the market was too high.

00:24The market proceeded to go up for like three-plus years from there to even new heights again and again and again.

00:31So it's very difficult to call these turning points.

00:35But I think, you know, there are some echoes to what we're seeing in the markets today.

00:40I mean, there was a lot of excitement back then about the Internet.

00:43Today there is about AI.

00:45You know, one of the lessons of that period of the 90s is that some companies were great investments.

00:49I mean, Amazon, for example, looked like a lot of the other losers of that period,

00:53and people thought, well, they're losing so much money every quarter.

00:56Is that ever going to really turn around?

00:57Well, obviously, Amazon is one of the most valuable and important companies in the world.

01:03You know, in late 1990s, if you had the wisdom to be able to sort Amazon out from the many players

01:09that really had less solid business models, obviously, you would have made a lot of money with that decision.