Synopsis
In What Happens When the AI Bubble Bursts?, Leon Furze argues the current GenAI bubble will inevitably burst, much like the dot-com bubble of the late 1990s. He highlights the absurdity of the situation—Microsoft “investing” in OpenAI with server access that both companies then book as revenue, while in reality people are refusing AI, experiencing reduced productivity from “workslop,” and companies seeing little return on investment. The paradox is that the technology actually works: Furze uses GenAI for administrative tasks, and image, video, and audio generation have reached human-comparable quality. But “it works” isn’t enough—investors need promises of revolutionary change and huge returns, so the technology gets hyped beyond reasonable expectations. When the bubble bursts, Furze predicts both negative residue (fraud revelations, court cases, economic damage) and positive residue (cheap GPUs, skilled statisticians in a buyer’s market, optimized open source models). Like the dot-com bust that led to Web 2.0, useful technologies will remain: LLMs will continue to be useful though perhaps peaked, and generative tools will recede into the woodwork as mundane, ordinary technology. Furze concludes with his flash fiction piece “Afterglow,” imagining a future where GenAI components are “harvested” for practical applications like medical imaging and real-time audio processing, leaving something greater than chatbots behind.
Originally published at: https://leonfurze.com/2025/10/17/what-happens-when-the-ai-bubble-bursts/
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