The limits of bubble thinking: How AI breaks every historical analogy

It’s always the same story: A new technology appears and everyone starts talking about how it’ll change everything. Then capital rushes in, companies form overnight, and valuations climb faster than anyone can justify. Then, many many months later, the warnings arrive, and people suddenly remember the dot-com crash or crypto.

You’ve probably seen it before. And if you have, you probably think AI is the next bubble. Humans are great at pattern-matching. We’ve evolved to see patterns, so when something familiar emerges, we instinctively map it onto the closest story we already know. We think we’ve seen it before, and we’re confident we know how it ends.

But that instinct can mislead us. AI feels like a bubble because we’re forcing something genuinely discontinuous into a familiar story. The idea that everything that rises quickly must ultimately collapse sounds prudent. But it doesn ...