The AI boom has some striking parallels with the dotcom bubble of the early 2000s. But it also has some very distinct differences.
Like the dotcom era, simply adding “AI” to a company name today almost guarantees investor and media attention. In India alone, MCA filings show that in April 2026, 408 companies registered with AI and AI tech related names against 237 in April 2025 and about 86 a year earlier. In the UK, an average of 2,000 companies are being registered with AI in their names, according to the UK AI Sector Study 2024/25 and DataCentreNewsUK. In the US, FGS already tracks more than 8,000 AI companies.
The second interesting aspect is funding patterns. During the dotcom years between 2000 and 2002, investment was broad-based. Companies went public rapidly, raised money from retail investors and institutional investors alike, and the frenzy spread widely across markets. In the AI boom between 2023 and 2026 YTD, the opposite is happening. Capital is concentrating, not dispersing. One company alone — Anthropic — accounted for nearly USD 13 billion out of the roughly USD 40 billion raised in AI funding in 2025. The top AI firms and GPU companies are increasingly behaving like black holes, pulling disproportionate amounts of capital, talent and infrastructure into themselves. That is one of the biggest differences between 2000 and 2026. There have still not been many major AI IPOs yet, though the market expects giants like OpenAI to eventually test public markets.
The third difference is sectoral impact. During the dotcom boom, most internet companies emerged in consumer services, telecom, portals, media and basic web businesses. The AI boom is reshaping SaaS, enterprise software, fintech, healthcare, consulting and creative services. It is a very different spread, even as AI penetrates virtually every sector in the pursuit of efficiency, automation and cost reduction. One can argue that AI’s long-term impact may prove far deeper and more permanent than the internet boom itself. It can also be argued that what took the dotcom era three years to achieve, AI compressed into barely one.
Then comes the jobs question. The dotcom boom created jobs at massive scale — in India, the West and across Asia. Programmers, Java developers, HTML coders, web designers and IT service professionals became the defining workforce of the era. Even after the dotcom crash, the broader technology ecosystem survived and absorbed much of that talent. Coding and software engineering remained among the most valuable skills globally till the arrival of ChatGPT in November 2022.
The AI boom, however, is unfolding very differently. It is eliminating conventional white-collar jobs at a pace few imagined possible — including professions once considered relatively immune to automation, such as creative work, accounting and consulting. At the same time, it is creating a new class of highly specialised AI jobs. But unlike the dotcom era, the number of jobs being created is far smaller, even if compensation is significantly higher. AI is simultaneously emerging as both creator and destroyer.
The fifth aspect is perhaps the most important. During the dotcom boom, the internet technology itself was real. The companies often were not. Many businesses simply added “.com” to their names, launched basic web services and rode investor frenzy fuelled by massive FOMO. The same behavioural pattern is visible today. The underlying AI technology is very real and is already demonstrating measurable value. The issue is not whether AI companies exist or whether the technology works. The real debate, much like in 2000, is around valuation excesses.
“AI washing” has now become a widely used term in the media. It refers to companies aggressively branding themselves around AI despite having little or no meaningful AI capability in their actual business. The crucial difference today is regulatory scrutiny. Unlike the dotcom era, MCA in India now examines the AOA and MOA of companies to verify whether they genuinely intend to undertake AI-related business activities, instead of merely adding “AI” to the name to attract inflated valuations. That is a significant regulatory check. Presumably, many of these newly incorporated firms will actually work on AI and adjacent technologies, rather than simply deploying generic chatbots. Similar concerns are now emerging in the US, UK and EU as well, with regulators increasingly pushing for tighter disclosures around AI-linked business claims.
No comments:
Post a Comment