Beyond the AI ​​bubble – by Gennaro Cuofano

The comparison between today’s AI revolution and the dot-com bubble of the late 1990s has become ubiquitous in business discourse. It’s a bad comparison. Not because bubbles cannot form around AI – they can and probably will – but because the structural conditions, geopolitical context, economic foundations and technological architectures are fundamentally different.

This is important because a poor understanding of the nature of transformation leads to catastrophic strategic mistakes: overbuilding in the wrong places, underinvesting where it matters, and, most importantly, applying mental models from an era that no longer exists.

Having worked in the AI ​​industry for over a decade, observed the business evolution starting in 2017, and witnessed the paradigm shift that ChatGPT represented in late 2022, I have come to understand that we are not experiencing “Internet 2.0” or even a new technology cycle. We are witnessing the emergence of a different operating system for global trade and geopolitics, one that requires entirely new analytical frameworks.

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Discover the real forces behind decisions

The weekly newsletter is in keeping with the spirit of what it means to be a business engineer:

We always want to ask three fundamental questions:

1. What is the form of the underlying technology that connects the valuable accessory to its product?

2. What is the form of the underlying activity that connects the element of value to its distribution?

3. How can the company survive in the short term while adhering to its long-term vision through a transitional business model and market dynamics?

These non-linear analyzes aim to isolate the short-term hum and noise, identify the signal, and ensure that the short-term and long-term can be reconciled.