Having been out of work for a while, people ask me if I’ve been displaced by AI. My reply is “Not directly.” Indirectly, I think the factor is that just about all venture capital funds are throwing money at AI-related companies, meaning non-AI startups that might need technical writers aren’t being funded.
Having lived through the dotcom bust, I have to wonder how bad the fallout from the AI bubble bursting is going to be. The dotcom bubble wasn’t all beenz and pets.com…
…and it fueled a whole lot of subsidiary bubbles: PC and server manufacturers to run the software, Microsoft to run the PCs, semiconductor manufacturers to provide chips for the PCs and servers, semiconductor equipment manufacturers to build those same chips, network gear providers to connect the data centers, etc. And that only scratches the surface. Cisco, Dell, Compaq, Netscape, Yahoo, AOL, Oracle, Sun, HP, Intel, AMD, Applied Materials (where I worked 1997-2001), LAM Research, KLA-Tencor, all had huge growth spurts during the dotcom era as their customers spent big money to get “on the web.” Even dinosaurs like IBM, Motorola and DEC enjoyed business boosts from the era. All suffered in the wake of the dotcom bust, some being bought up or disappearing into other companies.
The same is true of today’s multi-trillion dollar AI boom. Companies like OpenAI may get the most ink, but a whole lot of other companies are getting boosted as well. Some of the names are even the same as the dotcom bubble: Microsoft, Oracle, AMD. Applied Material stock has gone through the roof now that I don’t own any. Cisco is just getting back to the level of their record stock highs during the dotcom era.
Data centers are supposedly planned or going up all around the country, and so many are buying Nvidia’s AI chips that they now boast a breathtaking $4.88 trillion market cap.
Someone is supposedly going to build a $165 billion data center in New Mexico near El Paso. That number is kind of insane, as you could build 5-10 cutting edge fabs for that kind of money. I don’t see how you get any sort of ROI on such a big upfront investment.
Nuclear power is also seems to be enjoying a long-overdue renaissance due to AI, as a lot of companies think it’s just the thing to power those AI data centers. Google plans to restart an Iowa nuclear plant. Fermi America just announced “plans to build a ‘first-of-its-kind behind-the-meter HyperGrid campus‘ back in July, and now it has signed deals to begin the engineering of four nuclear reactors” in Amarillo. (Former Texas Governor and Energy Secretary Rick Perry is also involved.) And the Trump Administration just announced a contract to support Westinghouse’s nuclear power initiatives, though the “aggregate investment value of at least $80 billion” is not the same as some of the “Trump is subsidizing nuclear power with $80 billion” headlines.
When the AI bubble busts (not if, when), a whole lot of these projects will likely come a cropper. A lot of people will have made a lot of money, AI will probably revolutionize a few industries and prove mostly hype in others, and retail investors and bondholders will be left holding the bag. Like the doctom bust, a lot of new companies will rise from the wreckage and start the cycle all over again.
And companies that can best take advantage of idle data centers and newly abundant nuclear power (assuming the boom even lasts that long) will be the ones poised to help build the next tech boom…