Are we in an AI bubble and what will happen if it pops?

Drawing on three decades of experience in financial technology and investment research, Bipsync CEO Graeme Faulds reflects on today’s AI boom and what history can teach us about real, lasting innovation.

In recent weeks, there have been a lot of reports suggesting that AI is a bubble reminiscent of the DotCom bubble of 2000. I’m old enough to have been working through that boom and bust, and I remember how it felt, the types of conversations that took place, and the promises that were made. I’ve certainly seen similar levels of hype and hyperbole recently as we saw in the late 1990’s. As I did then, I’ve heard how AI is going to transform the world in 101 different ways. Like then, I’ve also heard that industries will be disrupted. However, unlike back then, I’ve not heard the refrain that we are in a different economic paradigm. In the late 1990’s, some people were arguing that the old rules of economics and commerce no longer applied. This belief certainly amplified the bubble. Such arguments were proven to be ridiculous and subsequent bubbles while exhibiting similar levels of hype were always more constrained. Think blockchain.   

What is similar about today and the DotCom bubble is that there probably will be a divergence between the market bubble and the technology. The DotCom bubble saw the collapse of companies like Pets.com and eToys, but the dominance of companies like Google and eBay. The internet itself was a new technology that has revolutionised the world in which we operate. The bubble was a short term over-reaction. This is what today feels like. Everywhere you look new AI companies are emerging. In the world of FinTech, it seems like there is a new entrant every week that is grabbing the attention of some segment of the market. So many of them feel like the shiny new thing. Even though these companies are often nascent, sub-scale and over-hyped, they do capture attention. They add to the AI noise that so many buyers are having to contend with. 

We see it here at Bipsync. Every week clients ask about a new entrant, if we know them, integrate with them, or if others are using them. The value of longevity seems to have been abandoned in favour of the shiny new thing. I hope that doesn’t make me sound like a dinosaur. I am no luddite. I’ve always been tech focused, hence why I work in technology today. I honestly believe this is the most exciting time to work in Fintech because of AI. When I see what AI can do, especially with some of those time-consuming tasks that I previously spent hours, days, even weeks doing as an investment analyst, I am blown away. AI is, and will continue to, radically transform the workplace. There will be winners and losers. Just randomly applying AI to a solution is the DotCom equivalent to simply launching a .com website in the 1990’s. There has to be true value-add, a reason for implementing AI, and for it to be applied in a way that is genuinely transformational. 

Just randomly applying AI to a solution is the DotCom equivalent to simply launching a .com website in the 1990’s. There has to be true value-add, a reason for implementing AI, and for it to be applied in a way that is genuinely transformational.

Here at Bipsync, we knew we had to invest in AI as it is a very natural fit with what we do. We spent time talking to our clients to understand where it could add value and how. But then we had a breakthrough: Bipsync has been structuring un-structured data for over a decade. It is such a part of what we do, we almost took it for granted. With this revelation, we have been able to leverage that expertise and ensure our AI solution is not a mere bolt-on, but an intrinsic uplift in what Bipsync is.

Bipsync has been structuring un-structured data for over a decade. It is such a part of what we do, we almost took it for granted. With this revelation, we have been able to leverage that expertise and ensure our AI solution is not a mere bolt-on, but an intrinsic uplift in what Bipsync is.

We are a clear example of the value in longevity. Yes, some new entrants will succeed, after all, we were a new entrant at one stage, as was Google. Yes, there will be a correction, there will be natural selection, but as with the DotCom bubble, the underlying technology will prove to be revolutionary and persist.  

Our new AI feature, Toro, is like having an extra team of investment analysts at your disposal. Our heritage structuring data means that we can apply AI to the highest fidelity dataset imaginable, which means high-value outcomes.