Lately, I’ve found myself coming back to this question more often. Every generation has its moment when optimism starts to look a lot like speculation. Prices rise, expectations grow even faster, and suddenly everyone has an opinion. To make sense of where we are today, I think it helps to start with something simple: what a bubble actually is.

What a bubble really is (and isn’t)

The word bubble gets used a lot, especially when markets move faster than people expect. But not every price surge is a bubble, and not every correction is a crash. It is easy to call something a bubble when it looks expensive, yet that does not explain what is happening underneath.

At its core, a bubble is a story that becomes more powerful than the facts. Prices rise because people believe they will keep rising. Each new high seems to confirm that belief, attracting even more buyers. It becomes a self-reinforcing loop built on confidence, momentum, and a touch of collective imagination.

What separates a healthy market from a bubble is not the level of enthusiasm, but the connection between expectations and reality. In a healthy market, prices still reflect future value, even if they are optimistic. In a bubble, that connection breaks. People stop asking “What is this worth?” and start asking “How fast can it go up?”

A bubble does not start with greed. It usually starts with something real, a breakthrough, a new technology, a big idea. The railroad, the internet, housing, AI. Each of them began as a genuine innovation that changed the world. But somewhere along the way, excitement turns into exaggeration. The narrative outpaces the numbers, and belief becomes the main currency.

A short tour through history’s greatest bubbles

If we look back, financial history is full of moments that felt revolutionary. Each bubble started with a big idea that made perfect sense at first. It was the excitement that followed that made things spiral.

The Tulip Mania (1630s, the Netherlands)

In the Dutch Golden Age, tulips became symbols of beauty, wealth, and status. Their rarity made them irresistible, and soon bulbs were traded like gold. At the height of the craze, one bulb could buy a house in Amsterdam. 

When buyers suddenly disappeared, the market collapsed almost overnight. What had been a luxury passion became a cautionary tale that still fascinates economists today.

The Railroad Mania (1840s, Britain and the US)

When railroads appeared, they promised to connect cities, move goods faster, and make investors rich. The logic was flawless: trains were the future. Capital flooded in, often before the tracks were even built. In some cases, investors bought shares in railway lines that led quite literally to empty fields. 

Even Charles Darwin, known more for evolution than economics, invested heavily and ended up losing around 60 % of his investment when the bubble burst. When the first lines turned out to be less profitable than expected, confidence collapsed. Many companies went bankrupt, but the rails that survived became the backbone of modern transport.

The Dot-com Boom (1990s, United States)

The rise of the internet brought a new kind of optimism. Everyone wanted to be part of the digital revolution. Investors threw money at anything ending with “.com,” even if the company had no revenue, no plan, and sometimes not even a product.

In 1999, Pets.com spent millions on a Super Bowl ad featuring a sock puppet that quickly became a symbol of excess. When the market went through correction, trillions were lost, but what remained was real: the internet infrastructure, new ideas, and the beginnings of the companies that now dominate global markets.

The Housing Bubble (2000s, global)

Unlike tulips or tech stocks, housing felt safe. Real estate was seen as a stable investment that could only go up. Banks made it even easier by offering loans to anyone who asked, bundling those mortgages into complex financial products few understood. At one point, even taxi drivers were buying second homes as “investments.”

When people started defaulting on their mortgages, the entire system cracked. What followed was the global financial crisis that defined a generation. The irony is that the system was so profitable that even some risk managers in major banks couldn’t fully explain how it worked.

Each of these bubbles had the same pattern. A real innovation or opportunity led to excitement, excitement led to excess, and excess led to collapse. But they also left something valuable behind. Railways transformed travel, tulips stayed beautiful, the internet became essential, and the housing crisis led to stronger regulations.

History shows that bubbles are not just failures. They are also periods of accelerated learning and progress, driven by our never-ending desire to believe in the next big thing.

The new face of euphoria

And now here we are again, standing in the middle of another wave of optimism. This time, the story revolves around artificial intelligence. 

By the end of 2024, the global AI market was worth around $280 billion. Fast forward just one year and the worth could hit $390 billion, with projections soaring to $3.5 trillion by 2033. That’s a quantum leap driven by round-the-clock innovation in industries like automotive, healthcare, retail, finance, and manufacturing.

The writing is on the wall. The companies setting the pace today will shape how we live, work, and spend tomorrow.

Nvidia in particular has become the poster child of this era. The company’s chips power most of today’s AI systems, and its market value has climbed to heights few thought possible. Just as Apple once symbolized the smartphone revolution, Nvidia now represents the age of AI.

But it is not only about big names or stock prices. Startups are launching at record speed, building tools that can write, analyze, design, and even think alongside us. Overall, there is a genuine belief that we are on the edge of something transformative.

Of course, the speed of change also brings questions. Are valuations running too far ahead? Is every company really an “AI company”? Possibly not. But maybe, for once, optimism is justified. Because this time, the foundation is stronger, the adoption faster, and the impact already visible.

When everyone expected a crash and it never came

History also shows the other side. Moments when people were convinced a collapse was inevitable, and it simply did not happen. After the 2008 crisis, many believed that once central banks ended quantitative easing and raised interest rates, a decade of market growth would vanish. Yet when rates finally rose, the feared breakdown never arrived. Markets bent but did not break, companies kept growing and innovation continued to push everything forward.

There are many similar stories:

• People said the euro would fall apart. It didn’t.
• They predicted Western economies would stagnate after China opened up. Instead, global growth accelerated.
• They laughed at social media companies, saying they would never be profitable. Today they are among the strongest businesses in the world.
• Even smartphones were called a fad before they reshaped daily life.

In each case the crowd was certain, and the crowd was wrong. The world adjusted. Markets evolved. Long term growth kept unfolding for those who stayed invested.

Why this time might be different 

Every bubble begins with something real. The idea itself is usually sound, but the collective excitement can take it too far. Still, this time something feels more grounded. AI is not a promise waiting for proof. It is already here, shaping how people work, learn, and create.

• Technology is real and already here - unlike in many past bubbles, the core innovation is not theoretical. AI tools are already solving problems, automating processes, and improving productivity in measurable ways. Companies that adopt generative AI report clear gains in productivity and efficiency. In one widely cited study, employees using AI tools saved an average of 5.4 % of their weekly working hours, a shift that lifted productivity across entire organizations. In technical roles, the performance boost is even more significant. And unlike the early internet, which needed years of infrastructure and training, AI is available to anyone immediately. A laptop or a smartphone is enough to start using it, testing it and building with it.
  
  
• The money is bigger, but the world is too - the economic numbers surrounding AI can seem overwhelming: multibillion-dollar valuations, record investment rounds and global excitement. Yet today’s capital markets are vastly larger than during earlier tech cycles, and technology now makes up a far bigger share of global economic activity. In a world operating at a much bigger scale, what looks extreme is often simply proportional. That scale is reflected in AI’s market impact. The combined value of AI-related firms has risen by several trillion dollars in a remarkably short time. One estimate shows that eight major AI-oriented companies alone added USD 4.3 trillion in market value in just over nine months. At certain points, a small group of AI-driven firms accounted for around 60 % of total gains in the US stock market. These figures aren’t hype, they show how deeply AI is already woven into modern business models, decision-making and product development.
  
  
• But the psychology is still the same - the one thing that never changes is human behavior. Excitement, fear of missing out, and the belief that this time will be different, drive every cycle. The difference now is that more people recognize the pattern, even if recognizing it does not always stop us from repeating it. Maybe it's really different this time, or maybe it just seems different because we're in the middle of it all. Technology is real, optimism is real, but the risk never sleeps. It's the tension between dreams and reality that drives the world forward.

Possible futures

Trying to predict the future of any new technology is difficult. With AI, it feels almost impossible. Still, it helps to imagine a few possible paths the story could take. None of them are certain, but each tells us something about where we might be headed.

1. The classic bust 

The excitement runs ahead of reality. Too many companies promise too much, too soon. When progress slows or investors lose patience, capital starts to dry up, and valuations fall. The weakest players disappear, and the conversation shifts from revolution to disappointment. It is painful in the short term but often clears the way for stronger ideas to grow later.

2. The soft landing 

Growth continues, but the pace becomes more realistic. Investors start to focus on fundamentals instead of hype. AI becomes less of a headline and more of a normal business tool, quietly improving productivity across industries. The energy cools down, but the results stay. This is the healthiest outcome and the one that usually builds the most lasting value.

3. The true transformation 

The most optimistic scenario is that AI continues to accelerate and becomes as essential to life as electricity or the internet. Entire industries are reshaped, new ones are created, and global productivity rises to levels we have never seen. The optimism of today would, in that case, turn out to have been justified.

In reality, the future may combine parts of all three. Some areas of AI could face corrections, while others continue to grow steadily or even faster. What matters most is not guessing the exact outcome but understanding that progress rarely moves in a straight line.

How we can think about it

Every period of excitement brings both opportunity and risk. That balance has never changed. What changes is how we react to it. The conversation around AI often swings between extremes. Some people see unlimited potential; others are waiting for everything to collapse. The truth usually lives somewhere in between.

History shows that big innovations move forward in waves. There is hype, doubt and cooling moments, but progress does not stop. It never has. We have gone through this with railways, electricity and the internet. Each time people were unsure, and each time the world kept evolving.

So, the real question for investors is simple. Do you try to guess the perfect moment, or do you stay invested and add gradually as the world evolves. Waiting for the ideal price often sounds smart, but in reality, it has caused people to miss more growth than any correction ever did.

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My view is straightforward. Do not panic. Do not chase. Do not sit out for years waiting for the perfect signal. Build your position slowly, stay disciplined and keep your eyes on the long term.

There will always be a reason to sell, a reason to wait and a reason to doubt. But the long-term path is clear. We have been through all of this before, and we always evolve. Progress keeps moving, and the world moves with it.