I've been through three tech bubbles now - dot-com, social media, and crypto. This AI spending acceleration feels different, and not in a good way.
Gartner's latest forecast predicts $1.5 trillion in AI spending for 2025 alone, surpassing $2 trillion by 2026. That's faster growth than any tech sector in history. During previous bubbles, you could at least point to actual users or revenue. With AI, we're spending trillions on infrastructure for products that barely work.
Here's what's actually happening: every company is terrified of being left behind, so they're throwing money at anything labeled "AI" without understanding what they're buying. I've consulted for Fortune 500 companies that allocated $50 million AI budgets without defining success metrics beyond "we need to do AI."
The infrastructure spending is real - data center investment is expected to hit $1 trillion through 2030. But most of these facilities will sit underutilized because the AI applications don't exist yet. It's like building highways for cars that haven't been invented.
The scary part is how detached this is from economic fundamentals. Google searches for "AI bubble" plummeted in the past month, which is classic bubble behavior - peak skepticism followed by complacency right before everything crashes.
I remember similar patterns in 1999 when everyone stopped questioning dot-com valuations. "This time is different" became the mantra. Same energy now, except instead of websites, it's ChatGPT wrappers burning through venture capital.
The difference between this bubble and previous ones: the infrastructure costs are front-loaded and massive. When dot-com crashed, companies lost websites and marketing budgets. When AI crashes, we'll have hundreds of billions in stranded data center assets and specialized chips nobody needs.
Most of these AI companies are just API wrappers around OpenAI or Anthropic. 90% of them will disappear, as detailed in AI bubble analysis, when the funding dries up, probably in the next 18 months when investors realize they're paying enterprise prices for chatbot features.
The government shutdown timing is almost poetic - while DC can't fund basic operations, Silicon Valley is planning to spend nearly $3 trillion on artificial intelligence infrastructure. The contrast shows how disconnected tech investment has become from actual economic priorities.