Everyone is talking about AI bubbles. But I think AI bubbles are not the real issue. In every major technological era, bubbles happen. They are not anomalies; they are features of progress.
In a seminal paper I wrote in Harvard Business Review, I tracked gross world product (GWP) across two millennia and arrived at a simple conclusion: societies move from invention to innovation eras only when property rights are established at scale. When innovators are confident they can design, own, and profit from their ideas and outcomes, they begin to take real risks.
In the 13th century, some of the wealthiest merchants in society were unwilling to fund chemists and inventors to commercialize their discoveries, not because the ideas lacked promise, but because there were limited mechanisms to protect and appropriate the value of the outcomes. Without enforceable rights, invention remained largely academic.
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By the 18th century, however, systems of patents, contracts, and legal protections became standardized. And with that, the game changed. Innovation moved from curiosity to commerce. Capitalist ambition, yes, even greed, entered the system, and a contest began: who would win, and who would go home. Out of that contest, progress was born.
History is clear:
- As Intel rose, Fairchild and Shockley Semiconductor faded.
- As GM, Ford, and Chrysler ascended, dozens of Detroit automakers went bankrupt.
- As Microsoft dominated, WordPerfect, Lotus, and many productivity tools disappeared.
- As the world converged on iPhone, Samsung Galaxy, and Google Pixel, countless phone brands went under.
- In the world of EV champions like Tesla or BYD, more than 200 EV startups have gone bankrupt.
- In Nigeria, finance house and banking licenses were once issued like candy in 1990s, and most failed. Yet from that same cohort emerged four of today’s five leading financial institutions.
That is creative destruction at work. And that is exactly what will happen in AI. So, do not obsess over the bubble. The bigger bubble is not participating at all. If you sit out, your future is already priced at zero. If you try, you at least give yourself a chance to be among the winners. Yes, there will be an AI bubble. And yes, many will fall. But post-bubble, a new order will emerge with stronger firms, new business models, and fresh economic possibilities.
Relax and ask: what is not a bubble today? Even in America, college graduates struggle to secure decent entry-level jobs. In Nigeria, the university bubble has been around for more than a decade. Yet people do not stop going to school. Why? Because even after bubbles burst, society still advances. From the miry clay, new futures rise.
Indeed, the real question is not whether a bubble exists, but whether you will be on the positive side of what comes after, since there is abundance in bubble, and we must not blindly fear it because it is part of the game!
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