Metadata
- Author: craigmccaskill.com
- Full Title:: The Bubble That Knows It’s a Bubble
- Category:: 🗞️Articles
- URL:: https://craigmccaskill.com/ai-bubble-history
- Read date:: 2025-08-31
Highlights
Anthropic raised 170 billion valuation despite negligible revenue. (View Highlight)
Sound familiar? It should. This exact sequence—revolutionary technology, abundant capital, speculative frenzy, then sudden reality checks—has played out with remarkable consistency for over 180 years. Railway Mania in the 1840s. Radio stocks in the 1920s. Dot-com fever in the 1990s. Each time, the technology was real. Each time, the speculation was unsustainable. Each time, the overbuilding became tomorrow’s foundation. (View Highlight)
The Wall Street Journal, that bastion of financial sobriety, suggested investors “re-think” the “quaint idea” that companies should be profitable. (View Highlight)
The bubble’s victims unknowingly funded the future. They just paid a decade too early. (View Highlight)
This creates a paradox: the most transparent bubble in history might also be the most inevitable. Because knowing you’re in a bubble doesn’t stop you from participating. Ask anyone who bought GameStop during the meme stock frenzy. They knew it was insane. They did it anyway. (View Highlight)
If AI really does break every historical pattern? Well, then we’re about to witness the greatest creation of wealth in human history. That’s a bet many find worth taking. (View Highlight)
History offers clues but no certainties about timing. Railway Mania lasted roughly four years from acceleration to crash (1843-1847). The dot-com bubble’s acute phase ran about five years (1995-2000). The pattern suggests major technology bubbles take 4-6 years from mainstream awareness to collapse. (View Highlight)
The most reliable indicator? Watch for the moment when AI companies start acquiring each other with stock instead of cash. That’s historically been the last stage before collapse. (View Highlight)
But somewhere in that mix, 5% are actually charging money for solutions people need today. Companies with boring enterprise contracts might outlast those creating viral demos. (View Highlight)
The AI companies that survive might be those automating tasks people hate doing, not those promising artificial general intelligence. (View Highlight)
History’s lesson isn’t “avoid bubbles.” It’s “position for what comes after.” (View Highlight)
The Railway Mania gave Britain train networks and industrial jobs. The dot-com bubble gave us e-commerce and digital careers. The AI bubble might give us unprecedented productivity and fewer jobs. That’s a social equation we haven’t solved. (View Highlight)