Understanding the AI startup bubble by looking back at crypto and NFT trends
When I hear about the rise of new AI startups, it’s hard not to think back to the wild days of crypto and NFTs. That’s because many AI startups today remind me a lot of the crypto and NFT startups from a few years ago — all talk, lots of buzz, but often, not much substance.
This trend can be summed up by what I call the “hubris cycle” of tech startups. It starts with a hot topic, like AI is right now, and entrepreneurs rush to create companies that tap into this hype. They look for venture capital, secure investment, and pay themselves big salaries while often delivering little to no real-world value. Eventually, these companies go bust, founders move on, and the cycle begins anew with another buzzword.
The Familiar Pattern of AI Startups
AI startups are popping up everywhere, claiming they’ll be the next big thing. But how many are truly innovative, and how many are just dusting off old ideas with AI branding? This reminds me of the frenzy during the crypto boom when it seemed like every company was trying to attach “blockchain” or “NFT” to its name. Many of those companies failed spectacularly or faded into obscurity.
Venture capitalists are partly to blame — they don’t want to hold onto cash, so they’re willing to take gambles on startups hoping to catch the next Uber, DoorDash, or ChatGPT. Statistically, only a tiny fraction will succeed, but that small chance is enough to fuel the hype and investment frenzy.
Why the Repetition?
From my perspective, it’s not just about the technology but about the economics behind startup funding. Investors want to put money to work, founders want to get funding, and there’s a social prestige to being a “serial entrepreneur” in whatever the hot tech buzzword is these days. Unfortunately, that structure creates an environment where it’s easier to hype something than to build something great.
How to Spot the Real AI Innovators
Despite the noise, there are genuine AI startups doing amazing things. The trick is to look beyond the buzzwords and ask hard questions:
- What problem is this startup really solving?
- Is the product actually available and usable?
- Does the team have a track record of execution or just marketing?
If the answers are vague or evasive, it might be a sign that the company is more about hype than substance.
Learning from Past Trends
Remembering the crypto and NFT hype cycles teaches us to stay skeptical but hopeful. Tech bubbles often overinflate but sometimes clear the way for real innovation to surface. Keeping an eye on reputable sources like TechCrunch or MIT Technology Review can help spot trustworthy AI breakthroughs.
In the big picture, AI is a powerful tool with genuine potential. Just like the crypto world matures over time, hopefully, the AI startup scene will too — with more focus on creating value and less on chasing quick capital.
For anyone curious about startups and tech trends, it’s worth understanding the pattern. It’s not about hating AI or being pessimistic; it’s about being realistic and learning when to cheer and when to question.
Want to read more about AI startups and tech trends? Check out Crunchbase News for detailed startup analysis and VentureBeat for AI industry updates.