GenAI Gold Rush: Boom or Bubble?

The Hype Outpaces the Hustle

Generative AI companies have captured imaginations—and investor cash—at breakneck speed. Since OpenAI’s ChatGPT exploded onto the scene, venture capitalists have poured billions into startups promising AI-powered breakthroughs across industries. Yet beneath the buzz lies a critical issue: many of these startups lack clear, scalable revenue models. With sky-high valuations based more on potential than proven ROI, some industry insiders are questioning the long-term viability of these companies. The AI space may be booming, but the fundamentals behind that boom remain uncertain.

Déjà Vu from the Dot-Com Days?

Much like the late 1990s internet bubble, today’s AI market is flooded with companies chasing future profits rather than current performance. While a few players—like OpenAI, Anthropic, and Cohere—have secured nine-figure investments, many others are struggling with rising compute costs, minimal differentiation, and limited customer traction. Investors are starting to demand more operational discipline and real-world use cases. Without that, experts warn, many generative AI ventures could collapse under their own inflated hype, marking another painful lesson in tech over-exuberance.