Dot-AI: Bubble About to Burst?

In the last few weeks, the number of media and analyst reports on the AI bubble about to burst has significantly increased. For all business leaders betting on AI as their next savior, the risk is real. What happens if I pick a vendor to support my strategy that goes out of business or is acquired in the next few months? As we plan 2026 investment strategies and priorities, it is important to understand the landscape, risks, and opportunities to minimize exposure while ensuring your organization is not left behind.

Let’s start with the most common comparison: Dot-AI versus Dot-Com.

We cannot ignore the lessons from the dot-com experience, because when we fail to learn from history, history repeats itself.

For readers who missed the fun and excitement of the late nineties, a quick history recap. Between 1995 and 2000, speculative investment in internet-based companies surged. Many startups went public with little more than a business plan, leading to inflated valuations. In 2000 and 2001, the bubble burst. Billions in market value were wiped out, and many companies folded.

Today, we are seeing everyone rushing to define their company as a “Dot-AI company.” I have seen many pitches from company founders who claim to be AI companies but are simply application layers that connect to core LLM engines via APIs. Their primary differentiation is the “Dot-AI” in their name, but their position is indefensible, with the next new competitor just around the corner. Similarly, many companies, I believe, are trying to ride the wave, secure high valuations, and hope to exit before the bubble bursts. Some will make it, others will perish. That’s the reality: when the basic business foundation is weak, market position is difficult to defend, and the path to profitability is an illusion.

Does that mean we should stop investing in AI platforms that offer such promise?

No. The reality is that AI is a game-changer. The question is less about AI and more about the vendors and platforms.

Looking back at the dot-com days, there were casualties and there were survivors. The same craziness that gave us casualties like Pets.com, Webvan, and eToys also gave us success stories like Amazon, eBay, and Google. Despite the fact that the dot-com bubble was caused by overhyped and overinflated valuations and by investors desperate not to be left behind, the reality is that the web and the internet were game changers that have helped reinvent most industries and, dare I say, humanity as a whole.

AI has the same potential. It is not hype, and it’s not completely new. The underlying concepts around neural networks, machine learning, and other forms of artificial intelligence have been around for decades. I was learning and researching neural programming in the 90s when I was still at King’s College in London.

It’s just that every great technological shift in history has its moment when all the stars align. Looking at many of the casualties of the dot-com era, it’s clear that not all ideas were bad; some were simply too early before the market was ready, some did not have the sustaining power to continue funding until the time was right, and some were pulled down with others when investors got scared of the macro environment. Amazon went from a $116 stock price to $6 within days but emerged as one of the major success stories.

The AI shift is real, and all industries will be redefined by AI. It is and will be a defining pivot in history, but there will be casualties, survivors, and winners.

As CX and business leaders, we cannot ignore it but must ensure we manage investments that align with the business's overall strategy, pick vendors and partners carefully, and be ready to focus on learning and pivoting as needed.

As we continue down this path, I will share more thoughts and viewpoints in the coming weeks. Until then, learn to ignore the noise, focus on the basics of business to ensure you are creating a roadmap based on real value and not hype, and worry less about AI strategy and more about your customer strategy, where AI will be a piece of the puzzle that brings real value for your customers, business, and shareholders.

What’s your take? Tell me on LinkedIn. I read every comment.