The dot-com boom, a period of wild exuberance and extreme hype that began in the mid-1990s, built the foundations for the contemporary wired world. When the internet mania turned to bust in March 2000, it made a bit of a mess.

The trouble spread from Silicon Valley to the larger economy, which went into recession. More than $5 trillion in stock market value was destroyed. The unemployment rate rose to 6 per cent from 4 per cent. It was not the worst crash ever, but the hangover lasted a few years.

AI is being financed and controlled by multitrillion-dollar companies like Microsoft, Google and Meta that are in no danger of going kaput.Credit: Bloomberg

Now Silicon Valley is in the middle of an artificial intelligence boom that bears some obvious resemblances to the dot-com boom. Much of the rhetoric about a glorious world to come is the same. Fortunes are again being made, sometimes by the same tech people who made fortunes the first time around. Extravagant valuations are being given to companies that didn’t exist yesterday.

For all the similarities, however, there are many differences that could lead to a distinctly different outcome. The main one is that AI is being financed and controlled by multitrillion-dollar companies like Microsoft, Google and Meta that are in no danger of going kaput, unlike the dot-com startups that were little more than an idea and a bunch of engineers.

Amazon is not selling less toothpaste as it shells out billions on AI data centres, and Google is not selling........

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