AI boom and ICO hype: Two sides of same bubble

Traders Union
All News
Editors' Picks
AI boom and ICO hype

Jeff Bezos’ “industrial bubble”

Amazon Chairman Jeff Bezos believes the current wave of investment in artificial intelligence is an “industrial bubble.” Yes, it will lead to losses — but ultimately make society better off. According to him, in the midst of today’s hype, everyone gets funded.

“When people get very excited, as they are today about artificial intelligence, every experiment gets funded, every company gets funded. Investors have a hard time distinguishing between the good ideas and the bad ones,” Bezos said.

He drew a direct parallel with the biotech boom of the 1990s, when dozens of startups went bankrupt, but from that chaos came drugs that saved millions of lives. The analogy is no coincidence: Bezos is convinced that the same will happen with AI — today’s euphoria will fade, leaving only those who can truly transform industries.

Loading...

The tweet was deleted by the author.

But we saved everything 🙂.

He also recalled the dot-com bubble at the turn of the millennium — another period of overheating that, after a painful correction, gave rise to the giants of the modern economy. According to Bezos, such cycles drive progress: “When the dust settles and you see who the winners are, society benefits from those inventions. That’s what will happen with artificial intelligence too.”

Remembering the ICO era

The AI frenzy doesn’t just echo the dot-com and biotech booms — it has much in common with what happened in 2017, when the entire conversation revolved around ICO (Initial Coin Offerings). Back then, hundreds of startups issued tokens without products or business models, while investors rushed to buy them, chasing promises of a “new economy.”

Everything moved fast: white papers replaced prototypes, and roadmaps became marketing tools. Projects raised tens or even hundreds of millions of dollars in hours — often with no legal structure or transparency. Any idea labeled “blockchain” automatically became an investment asset, regardless of its actual utility or sustainability. The market operated on belief and speculation rather than analysis and due diligence.

The bubble burst quickly. After a record-breaking 2017, when ICO funding exceeded $20 billion, the market collapsed in less than a year. Thousands of tokens lost their value, most startups disappeared, and investor confidence evaporated.

Loading...

The tweet was deleted by the author.

But we saved everything 🙂.

Yet the consequences weren’t purely destructive. Out of that speculative chaos emerged the infrastructure of the modern crypto industry — standards, regulatory frameworks, and technological platforms that later formed the backbone of DeFi and Web3. The ICO era became a painful but necessary step toward the market’s maturity.

How AI mirrors ICO

A similar dynamic is now unfolding in the world of AI. Capital is flooding into everything linked to neural networks — from chipmakers and data centers to companies promising “next-generation cloud solutions.” The label “artificial intelligence” has become the same marketing trigger that “blockchain” once was.

As in the ICO era, the market is driven less by technology than by expectations. Funding rounds close within weeks, startups secure multi-billion valuations before releasing a product, and venture funds prioritize speed over due diligence. The key driver remains the same — fear of missing out. In 2017, it was fueled by dreams of decentralization; today, by the belief that AI will transform every industry. The only difference lies in scale: back then it was billions, now it’s trillions of dollars in potential capital.

Still, the resemblance between AI and ICO doesn’t mean both waves will end the same way. Just as the crypto market went through its cleansing after 2018, the AI sector will inevitably face its own reckoning. Hype-driven projects will vanish, while those creating real value will endure — just as Ethereum and Binance survived the end of the ICO Wild West. This, it seems, is exactly what Jeff Bezos meant by a “bubble with high returns”: before technology reshapes the world, it must first pass through the phases of overheating, disappointment, and maturity.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.