Money For the Rest of Us · Wednesday, July 29, 2026
The current AI buildout is compared to historical technological bubbles like the internet and railroads, characterized by rapid investment, competition, and potential oversupply. Financial historian Edward Chancellor's work on the capital cycle suggests that while new technologies spark excitement and investment, there's often more capital raised than ultimately needed, leading to a market retrenchment.
“There's something called the capital cycle, and this is from financial historian Edward Chancellor's, others have sort of discusses, but there's a new technology. And it sparks excitement and potentially high returns, but uncertain returns. We saw this in the internet bubble. In railroads. Now we have it in AI.”
“And often you get more capital raised, more investment, than what's needed. And so then you get to a part of the cycle where, well, the market realizes there's too much.”
“We likely see the same thing with this AI buildout. This grand AI experiment. And there will be technology spillover. And it's going to benefit all companies, both small and large, US, non-US, households, businesses, we're all benefiting from this experiment.”