Today's AI Moment

It’s still too early to call it a bubble, but there’s no doubt AI is no longer just a buzzword—it’s the thing. Everywhere you look, founders are building with it, investors are chasing it, and enterprises are reorganizing around it. We’ve crossed a threshold: the hype has tipped into real economic gravity. These days, if you're not doing something with AI, people start wondering why not.

Why is it too early to call the AI a Bubble

It’s too early to call AI a bubble because we’ve seen relatively few major exits—whether through IPOs or M&A—which typically characterize the late stages of speculative cycles. (Portco markups don’t count.) While some valuations are undeniably high, most haven’t reached the widespread, unsustainable levels seen in past bubbles. Crucially, the broader macroeconomy remains sluggish and financial markets have recently corrected; bubbles usually coincide with strong economic momentum and surging markets, not the early signs of recovery.

AI agents, in particular, are entering the hype cycle because the technology is mature, demand is high, and opportunities across industries are abundant. Yet, few truly understand how to effectively design, deploy, and manage them, especially regarding user experience and practical implementation.

Bubbles as Catalysts

It’s useful to reflect on how past technology waves have unfolded to understand where this might be headed. Larry Summers—a renowned economist and Harvard professor who’s held roles such as U.S. Treasury Secretary and Chief Economist of the World Bank—has long argued that financial bubbles, while disruptive, can also serve as engines of innovation.

One of his most frequently cited observations is this one: 

“There are times when what looks like excess and a bubble is actually essential to the financing of a transformational innovation.”

Summers points out that bubbles often lead to massive over-investment in new technologies—like railroads in the 19th century or the dot-com boom of the 1990s. While many of those early ventures failed, the capital they attracted helped lay critical infrastructure and seeded long-term progress.

Economist Carlota Perez echoes this in Technological Revolutions and Financial Capital (2002), arguing that bubbles aren’t inevitable but necessary. They channel speculative capital into building the infrastructure for transformative innovation, even if the process includes an inevitable correction.

The “FOMA” AI Gold Rush

We may be entering a similar period with AI. Call it the "FOMA" era—Fear Of Missing AI. Venture capital firms are in a frenzy, eager not to miss the next breakout. Term sheets are flying for anything with a whiff of defensible AI, and firms that were slow to back early winners are scrambling to catch up before the music stops. If crypto was last season’s high-stakes poker game, AI is now the entire casino.

For entrepreneurs, this moment is both thrilling and daunting. The map is still being drawn. Everyone’s searching for white space—whether in agent-based workflows, verticalized foundation models, or new infrastructure layers. The best founders aren’t just chasing trends; they’re thinking beyond the current wave, aiming to build enduring companies in one of the fastest-moving markets we’ve seen in decades.

Caution and Clarity Amid the Hype

But with every gold rush comes risk. History reminds us that periods of exuberance often blur sound judgment. When valuations soar and capital is easy, it’s tempting to prioritize speed over substance.

That’s why a measure of caution is essential. Not every company riding the AI wave will succeed—many are chasing momentum, not solving real problems. Investors and builders alike need to apply discernment: sustainable value will come from differentiated technology, defensible moats, and long-term execution, not just proximity to a trend.

Conclusion: Navigating the AI Moment

AI may be in the midst of its speculative cycle—but if history is any guide, this wave could leave behind enduring infrastructure and iconic companies. The challenge, as always, is knowing where we are in the cycle—and having the clarity to build or invest accordingly. We’ve seen this story before: hype can light the match, but execution keeps the fire burning.

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