"John Chambers, the former CEO of Cisco, knows a lot about tech bubbles. As a veteran of the internet's boom that led to the dot-com crash, he's seen his fair share of transformative technologies, and their effects on the industry. But the recent frenzy of AI-fueled investments and stock-market gains has Chambers experiencing déjà vu: The AI-hype feels all too reminiscent of the 1990s crash."
"Chambers said the new technology is moving at five times the speed and will produce three times the outcome of the internet age. "The problem this time is that if I am right about AI moving at five times the speed of the internet, we are going to destroy jobs faster than we can replace them," he said. "Will we be able to replace them over time? Yes, but there is going to be a drought while we have to re-educate lots of people,""
"In 1995, Cisco Systems had a value of around $15 billion. It later skyrocketed to $550 billion, making it one of the most valuable companies at the time in March 2000, before the investment bubble burst, which resulted in its stock tanking 80%. Though the networking giant bounced back since then-its stock price hasn't reached the level it once was during the internet madness."
Current AI-driven investment fervor resembles the dot-com bubble and creates risk for companies lacking sustainable competitive advantages. Historical valuation spikes and crashes show how markets can overvalue growth and then collapse. AI is progressing far faster and delivering larger outcomes than the internet era, intensifying economic disruption. Rapid automation threatens many entry-level white- and blue-collar jobs, potentially eliminating roles faster than replacements emerge and producing a period of workforce drought while extensive re-skilling occurs. Strong venture capital interest exists, but firms unable to convert AI into durable advantages face serious downside.
Read at Fortune
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