One of the entrepreneurs hit hard by the dotcom crash of 2000 says there is room for optimism amid fears of the artificial intelligence bubble bursting.
"It's definitely a bubble but it's a different kind of bubble," Tom Herman, co-founder of GovWorks, told The National. GovWorks, founded in 1998, promised to revolutionise how citizens interacted with government agencies.
The first feature it pushed allowed people to pay their parking tickets online. At the time the idea caught the attention of many investors with deep pockets. GovWorks became a media darling, the poster child of a technology boom that promised to lead to unprecedented prosperity.
GovWorks's story was so intriguing that a documentary crew followed Mr Herman and fellow co-founder Kaleil Isaza Tuzman around, as investor money flowed in and the company started hiring at a breakneck pace.
But with smartphones non-existent at the time and many Americans still without high-speed internet, GovWorks's business model fell far short of expectations and the company was among the many dotcom start-ups of the era to crash.
But Mr Herman – who has since founded Meta Carbon, a company that specialises in using technology for offsetting emissions – does not necessarily see parallels to current concerns over an AI bubble.
He said that although the dotcom crash caused a lot of headaches for investors and entrepreneurs, the overall arc of the internet prevailed.
"I think the internet changed the world probably more than all the hype originally," Mr Herman said.
Unlike the dotcom crash, in which some companies' ideas were ahead of the technology used by consumers, AI is creating solutions and getting people results, he said.
Mr Herman added, however, that some parts of history are being repeated.
"I recognise that the $5 trillion valuation of a company like Nvidia indicates an expectation of increased revenue and usage that seems almost inconceivable without cooking the planet," he said, reflecting on the electricity needed for AI data centres.
"The hype around AI is justified but the valuations are not."
Mr Herman said that in the late 1990s, GovWorks raised $60 million from investors on "almost nothing but an idea", and that ultimately became a problem when it came time to introduce a product in a new internet era.
GovWorks was hardly alone: there were countless website-based companies that were largely conceptual and attracted an influx of cash. Some even went on to initial public offerings, leading to the popularity of the phrase at the time, "Concept IPO".
Yet as Mr Herman points out, the overall technology infrastructure and AI tools offered are far more mature than what was available in the dotcom era.
Tim Bajarin, who has been a technology analyst and consultant for almost five decades, echoed Mr Herman's assessment of the current AI bubble fears.
"What we're heading into actually is a correction, not a collapse," Mr Bajarin said. He added it was not irrational for some investors to be concerned, but the fact that the technology behind AI is "richer, deeper and more focused" will help to soften any sort of disastrous predictions.
"We're more likely to see a normalisation period where investments will become more disciplined," Mr Bajarin said.
Some have pointed to the downfall of hyped companies such as Builder.AI, which once promised that its AI tools would make mobile app development as “easy as buying a pizza", as proof of a looming crash. But Mr Bajarin said those recent failures offer learning and are the exception to the rule.
"If you're using AI as window dressing, as opposed to solving a real problem, that's where I think you're going to see the separation of the wheat from the chaff," he said, adding that AI tools offered by OpenAI, Microsoft and Google are solving real-world problems for consumers and businesses.
"People just building something to call it AI doesn't bring the value to the proposition." Unlike the dotcom bubble, he said, many people have already got used to AI tools.
"It's not just for businesses, although they're taking great advantage of it. We're seeing people actually creating value using AI," Mr Bajarin said.
On Wednesday, semiconductor giant Nvidia, which has largely ridden the AI wave to unprecedented profits, helped to soothe worries of a bubble with its fourth-quarter results beating Wall Street expectations.
But even after Nvidia's positive results, markets still proved to be unpredictable on Thursday, partly prompted by continuing AI bubble fears and speculation that the Federal Reserve would not be cutting rates in December.
Comments made earlier in the week from Google's chief executive Sundar Pichai are also continuing to reverberate. Mr Pichai told BBC News that “there are elements of irrationality” with AI investments.
Regardless, Mr Herman, who also serves as chief technology officer for a startup, EcoClaim, said that even if there is a market correction with AI investments, the fundamentals surrounding the technology are strong.
This time, with the dotcom boom and bust well studied, he said the insights gained have not been forgotten.
"We have some wisdom that allows us to know where to focus and what to do," Mr Herman said, adding that he uses AI tools and apps in just about everything he does for work.
"When you apply wisdom to a lot of AI automated tasks, you can get a lot done, so harness it."
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DIVINE%20INTERVENTOIN
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Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
the pledge
I pledge to uphold the duty of tolerance
I pledge to take a first stand against hate and injustice
I pledge to respect and accept people whose abilities, beliefs and culture are different from my own
I pledge to wish for others what I wish for myself
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I pledge to always stand up for these values: Zayed's values for tolerance and human fraternity
PROFILE BOX
Company name: Overwrite.ai
Founder: Ayman Alashkar
Started: Established in 2020
Based: Dubai International Financial Centre, Dubai
Sector: PropTech
Initial investment: Self-funded by founder
Funding stage: Seed funding, in talks with angel investors
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
THE BIO
Bio Box
Role Model: Sheikh Zayed, God bless his soul
Favorite book: Zayed Biography of the leader
Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet
Favorite food: seafood
Favorite place to travel: Lebanon
Favorite movie: Braveheart
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MATCH INFO
New Zealand 176-8 (20 ovs)
England 155 (19.5 ovs)
New Zealand win by 21 runs
Lexus LX700h specs
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Power: 464hp at 5,200rpm
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Price: From Dh590,000
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
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Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
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Mica
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Stars: Zakaria Inan, Sabrina Ouazani
3 stars
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Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
RESULTS
%3Cp%3E3.30pm%3A%20Al%20Maktoum%20Challenge%20Round%203%20%E2%80%93%20Group%201%20(PA)%20%2475%2C000%20(Dirt)%202%2C000m%3Cbr%3EWinner%3A%20Jugurtha%20De%20Monlau%2C%20Pat%20Dobbs%20(jockey)%2C%20Jean-Claude%20Pecout%20(trainer)%3C%2Fp%3E%0A%3Cp%3E4.05pm%3A%20Dubai%20City%20Of%20Gold%20%E2%80%93%20Group%202%20(TB)%20%24250%2C000%20(Turf)%202%2C410m%3Cbr%3EWinner%3A%20Global%20Storm%2C%20William%20Buick%2C%20Charlie%20Appleby%3C%2Fp%3E%0A%3Cp%3E4.40pm%3A%20Burj%20Nahaar%20%E2%80%93%20Group%203%20(TB)%20%24250%2C000%20(D)%201%2C600m%3Cbr%3EWinner%3A%20Discovery%20Island%2C%20James%20Doyle%2C%20Bhupat%20Seemar%3C%2Fp%3E%0A%3Cp%3E5.15pm%3A%20Nad%20Al%20Sheba%20Turf%20Sprint%20%E2%80%93%20Group%203%20(TB)%20%24250%2C000%20(T)%201%2C200m%3Cbr%3EWinner%3A%20Al%20Dasim%2C%20Mickael%20Barzalona%2C%20George%20Boughey%3C%2Fp%3E%0A%3Cp%3E5.50pm%3A%20Al%20Bastakiya%20%E2%80%93%20Listed%20(TB)%20%24170%2C000%20(D)%201%2C900m%3Cbr%3EWinner%3A%20Go%20Soldier%20Go%2C%20Adrie%20de%20Vries%2C%20Fawzi%20Nass%3C%2Fp%3E%0A%3Cp%3E6.25pm%3A%20Al%20Maktoum%20Challenge%20Round%203%20%E2%80%93%20Group%201%20(TB)%20%24450%2C000%20(D)%202%2C000m%3Cbr%3EWinner%3A%20Salute%20The%20Soldier%2C%20Adrie%20de%20Vries%2C%20Fawzi%20Nass%3C%2Fp%3E%0A%3Cp%3E7.10pm%3A%20Ras%20Al%20Khor%20%E2%80%93%20Conditions%20(TB)%20%24300%2C000%20(T)%201%2C400m%3Cbr%3EWinner%3A%20Al%20Suhail%2C%20William%20Buick%2C%20Charlie%20Appleby%3C%2Fp%3E%0A%3Cp%3E7.45pm%3A%20Jebel%20Hatta%20%E2%80%93%20Group%201%20(TB)%20%24350%2C000%20(T)%201%2C800m%3Cbr%3EWinner%3A%20Alfareeq%2C%20Dane%20O%E2%80%99Neill%2C%20Charlie%20Appleby%3C%2Fp%3E%0A%3Cp%3E8.20pm%3A%20Mahab%20Al%20Shimaal%20%E2%80%93%20Group%203%20(TB)%20%24250%2C000%20(D)%201%2C200m%3Cbr%3EWinner%3A%20Sound%20Money%2C%20Mickael%20Barzalona%2C%20Bhupat%20Seemar%3C%2Fp%3E%0A
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Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
ABU%20DHABI'S%20KEY%20TOURISM%20GOALS%3A%20BY%20THE%20NUMBERS
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MATCH INFO
France 3
Umtiti (8'), Griezmann (29' pen), Dembele (63')
Italy 1
Bonucci (36')
