The rhymes of history

The total capital expenditures (CapEx) related to Y2K preparedness in the late 1990s were estimated to be between $300 billion and $600 billion globally. In the United States, businesses and government agencies spent around $100 billion to upgrade and fix their systems. The top 10 companies in the US in the 90’s aggregated capex was around $25Bn. That gave birth to the internet, and its siblings, social networks and the cloud. Today, only in the US, the top 4 companies cloud Capex related to AI, amounts to $338Bn only for fiscal year 2025. The amount of money going into AI is staggering, and perhaps its siblings we’ll be talking about in 20 years will be autonomous cars & drones, robots and agents able to resolve, or help humans resolve, the most important problems (even corruption). But if history rhymes, the story does not happen in a straight line, and we did have a severe correction in 2000’s, because valuations and expectations get stretched. Are we at that point?

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