Artificial Intelligence Sector: The Next Technology Bubble? A Comparative Analysis with Dotcom Based on Stock Market Data

Robert Dobre
Daniel Bulin
Maria-Cristina Iorgulescu
Iulia Monica Oehler-Sincai
Olimpia State
JEL codes: 
E32 - Business Fluctuations; Cycles, E37 - Forecasting and Simulation: Models and Applications, E44 - Financial Markets and the Macroeconomy.
The main purpose of this research is to present a detailed comparison between the 1996-2001 Dotcom and 2014-2018 AI landscapes, by comparing the evolution of Dotcom and AI through a regression model aimed at testing the relationship between these two phenomena, which have similar characteristics, but also distinct features. In a period when the academic and the business environment discourse is focused on the potential effects of diminishing funding and interest in AI and even a bubble burst, our investigation demonstrates the contrary. Having in mind the strengths of the AI market and its interrelations with significant sectors of the world economy, our paper denies the hypothesis of a potential AI crisis, in spite of some hints that AI companies are in the early stages of high risk. Our paper brings also another novelty element related to a different type of Schumpeterian creative destruction identified in the case of AI. The big players present on the market are able to purchase the firms that Schumpeter suggested would replace the existing firms, therefore the creative destruction occurs in the case of start-ups, which are undertaken by stronger companies present on the market, even survivors of the Dotcom crisis, not vice versa.
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