Wall Street Veterans remember the dot com bubbles like yesterday.
The good times seemed never to end, as they experienced the longest economic expansion in US history between the end of World War II and the 2000 years.
“Since October 1998, the market has supported the seemingly endless IPOs of dot-com companies without paying too much attention to the viability of their business models,” Goldman Sachs said of the era. “The financial bubble was expanding.”
There were some dangerous signs.
In 1990, the value of the shares traded on the Nasdaq was 11% of the value of the shares traded on the New York Stock Exchange. By December 1999, that percentage had swelled to 80%.
The Nasdaq rose 86% in 1999 alone, peaking on March 10, 2000.
And that's when the bubble burst.
“As the value of tech stocks plummeted, cash-bound internet startups have collapsed in a few months and are no longer worth it,” according to GS.
By October 4, 2002, the Nasdaq had fallen 77% from its peak.
Therefore, when Jeff Bezos, one of the world's wealthiest people, mentions the word “B,” the market tends to listen.
Amazon founder Jeff Bezos has invested heavily in artificial intelligence.
Earlier this year, Bezos' family office, Bezos Expedition, invested $72 million in Troca, an Amsterdam-based AI company.
And last year, Bezos was one of the most well-known investors in the $400 million funding round for Physical Intelligence, the robot startup Openai also counts as an investor.
Related: Sam Altman's latest fantasy AI predictions don't pass tests
Despite its relationship with the industry, Bezos has not blinded the runaway ratings that have become common.
“For example, when people get very excited about artificial intelligence… all experiments are funded, all companies are funded, there are good ideas and bad ideas,” Bezos said at Italian Tech Week held in Turin, Italy on Friday.
“In the middle of this excitement, investors are struggling to distinguish between good and bad ideas.”
Despite slippery estimates of the current market's state, Bezos is still bullish about the AI sector.
Related: Openai faces another scathing lawsuit
Bezos sees what is happening now as an “industrial bubble” that is more similar to the biotech bubble of the 90s. Many investors lost a lot of money in that bubble, but “we got some life-saving drugs,” he said.
So, whether many AI companies with a billion-dollar valuation fall on the roadside, or even if in Bezos' mind some investors are wiped out by the bursting of the bubble, technological advancements are worth it.
