Blog: Is the AI Bubble here? Looking at the Bubble Checklist

Bubble talk is picking up again. In the last few years it was talk about bitcoin and other cryptos. But lately it's been mostly about AI. With Chat GPT hitting the big time, the advance of the "magnificent seven," and the explosive rally after Nvidia announced its earnings, we may have an AI bubble developing. But we're not there yet.

Back in 1999, during the Tech Bubble, I came up with a bubble checklist by studying historical manias and bubbles. I revived this list back in 2021, but I thought it might be a good time to bring it up again because the use of the term "bubble" has become very lax. It seems that every overvalued market is called a bubble. But an overvalued market is a necessary condition for a market bubble, but not a defining one. A true market bubble is a cultural phenomena in addition to being a financial one. So, there are other criteria. Lets compare current market conditions to this list.