The Chat Bubble

Or, I've seen this pot coming to a boil. About 25 years ago.

In 1999, I was working in a tech transfer role for a Canadian Federal program that funded commercializable innovations coming out of academic research. Our niche was eLearning, which we called TeleLearning, and apart from the Canadian Federal Government, co-funders included such biggies as IBM and Sun Microsystems.

It was my job to help commercialize eLearning products, from protocols to user interfaces, being developed in Universities from coast to coast.

As such, I was in regular contact with the VC community, both in Canada and in the USA.

These were the heady days of the dotcom revolution. If you had a Powerpoint pitchdeck with a somethingsomething.com on the first slide, chances were you’d get some kind of funding.

Remember Pets.com? Well you won’t if you’re neither a Gen Xer or a Boomer.

According to Bing Chat, in 1999, a whopping $101 billion in VC money found its way to dotcom startups. That was the gold rush. In two years, most of that value would be eradicated when the bubble burst. A lot of people, good people, took a huge collective bath. In my own small way, I was one of them. Having had a startup that failed to raise a series A as the markets tumbled.

Today kind of smells the same to me.

VC money is not the big theme these days, rather, the tech itself is. You can’t turn left without hearing the terms “ChatGPT” or “Midjourney”. We discuss it at the dinner table.

Even bitcoin and cryptocurrency, an anonymously developed tech which eventually hit a trillion dollars in valuation, was not this sexy.

So are we approaching another bubble á la 2001? The jaded veteran in me would say:

Most likely.

I queried Bing Chat again. According to Bing (i.e. ChatGPT 4), 2022 saw $2.1 billion in VC dollars invested in AI startups. Hardly the $101 billion the dotcommers got, but it still represented a 425% increase in funding from 2020. And the reason I’m using Bing to research these facts is that Microsoft invested $1 billion in OpenAI alone, and recently announced $10 billion more in funding as the days go by.

That’s likely not included in the general VC funding stats-keeping.

And with the runaway success of ChatGPT4 and the myriad generative AI sexy kids in the last six months? I’d hazard to guess there are a shitload of fat checks getting cut these days, each day.

So why might this be a bubble forming, you ask? Well, if you’ll note, AOL-Time Warner, Yahoo, heck, even Netscape have all faded into obscurity. Before the bubble popped, there was no Google. There was no Facebook. Twitter, et al. all emerged post-bubblepop.

The chances that the sticky applications of AI technology have yet to emerge. What we see now are largely startups copying each other in an effort to be relevant and to compete. Many are often sexified wrappers of free, Open Source projects.

The real champs have yet to emerge.

I for one will be hesitating on pulling the trigger when the first big IPOs post up on the NASDAQ.

Now if you’ll excuse me, I have a business plan writing meeting with AutoGPT.