Definition
This is a financial term for a situation where a new thing becomes very popular, is hyped up far too far, generates a lot of money, and then when the hype bubble bursts, it crashes in value.
However, it differs from a normal bubble in that the fundamental core of the “thing” in question actually has a lot of real value, and the crash leaves something useful behind in terms of infrastructure and lessons learned.
Explanation
This is a relatively new phrase to me, although apparently it has been around for a while.
Of the times it has happened before, the one that obviously leaps to mind is the dot-com bubble, although it has happened in other sectors as well. A lot of railway companies had major crashes during the early days of commuter trains.
Basically, it means everyone gets really, really overexcited about a new technology and jumps on the bandwagon. But there is not enough money in the market for everybody to make all the money they want, and a lot of the people who are either late to it, or simply greedy and stupid, will lose out.
But the underlying value of the technology or thing is still valid. It will come back, but it will come back in a more measured way, reasonably priced and with more reasonable growth.
This is obviously aimed at the current AI market, although, in a very geeky way, it reminded me far more of JavaScript in websites than anything else.
I can remember everyone coding lots and lots of JavaScript on websites, putting JavaScript on everything, and then it suddenly becoming massively unpopular and everyone removing it. Now we are back to JavaScript for everything.
I think this is a valid expectation we are going to have to deal with for AI, and there will be a period of adjustment while the true value is established.
Disclaimer: As always these posts are not aimed at anyone client or employer and are just my personal observations over a lifetime of dealing with both management and frontline associates.