The peak of dot-com mania was identifiable even at the time: it was in January 2000, when AOL bought Time Warner for $183 billion. Peak podcast mania argiab;u came in 2020 when Spotify paid Joe Rogan $100 million (per rumor). It’s now time to call the peak of AI mania: Allbirds, which was loved a few years back for making sustainable wool shoes …has sold off all stock and assets, and is rebranding as Newbird AI to sell “AI compute infrastructure”. At The Overspill, Charles Arthur compares this to 2017, when Long Island Iced Tea renamed itself Long Blockchain, arguably the peak of bitcoin mania. His theory that all Newbird AI has left is a bunch of empty warehouses, so hopes someone will put data centers in them is the only possibility that makes any sense.
Most of those bits of history led to more financial silliness and then a crash. The AOL-TimeWarner marriage was notoriously catastrophic. AOL, which was supposed to modernize old, slow Time-Warner, in fact was already becoming obsolete as users shifted to new technology (broadband) and the wider Internet. By 2003, the company was selling itself off in pieces. Long Island Blockchain cratered; a year later it had abandoned its plans to buy bitcoin mining equipment. Its delisting by NASDAQ was accompanied by the SEC’s charging three people with insider trading. Joe Rogan of course remains hugely popular and Spotify is doing fine, but it’s certainly not controlling the business of podcasting as it appeared to hope it would.
The day following the announcemenet, Newbird AI’s shares rose as much as 700% (briefly), partly on the additional news that it will close a funding round of $50 million in the second quarter of 2026. Even CNBC calls this “pivot” bizarre.
For our purposes, it doesn’t matter if this wacky strategy works (pick your definition of “works”), because when the share price of a basically assetless company goes up 700% because it’s added “AI” to its name we have reached the absurdity that marks the peak of every bubble.
It’s not the only sign (or the only absurdity). In the UK, last month Aisha Down reported at the Guardian that many of the efforts prime minister Keir Starmer – and Rishi Sunak before him – has announced to “mainline AI into the veins” of the British economy are based on what she calls “phantom investments”. She reported faithfully that the Department of Science, Innovation, and Technology said it “rejected these assertions”, but this week we learned that at least one piece of her reporting was absolutely correct.
This week’s news revolves around a project called Stargate, announced in September 2025 and involving the UK-headquartered AI infrastructure provider Nscale, Microsoft, Nvidia, and OpenAI. This week, OpenAI announced it was putting the project – for which it was supposed to build a data center – on hold. OpenAI blames energy prices and, as Joseph Bambridge reports at Politico, the government’s decision last month to shelve proposals to allow data miners to use copyrighted content unless its owner opts out. The proposal was widely opposed by the UK’s creative industry, and was indefinitely delayed in a report issued on March 18 (ReedSmith has a useful legal summary)..
The loss – or delay – of Stargate is a rounding error to companies the size of Microsoft and Nvidia. It’s more significant for Nscale, which according to CNBC raised $2 billion in a funding round just last month with investments from Nvidia, Dell, Lenovo, and other much less famous names; at the same time, it added former Google and Facebook ad business builder Sheryl Sandberg and former Facebook global policy head Nick Clegg to its board. The new funding raised Nscale’s valuation to $14.6 billion. At his blog, Ed Zitron calls the ability to raise funding for a data center that doesn’t exist “weird“, and suggests that AI companies should admit that their chatbots are just “regular old software”.
Meta king Mark Zuckerberg, last seen losing money on the former next-big-thing metaverse, is, Megan Bobrowsky reports at the Wall Street Journal, building an AI agent to get him information and answers faster. This comes on top of last month’s announcement that Meta is buying the AI agent network Moltbook, seemingly mostly in order to hire its two founders for Meta’s Superintelligence Labs. This week, Zuckerberg also announced he was building an AI clone of himself to interact with staff so they can feel more connected to him. Seems like in reality it would make corporate management feel like automated customer service.
The question about bubbles is always: is this one like railroads or like tulips? Tulips left nothing of value behind while railroads went on to be transformative. In 2001, almost everyone knew the Internet would go on growing in size and importance. In the AI case, despite the current silliness, over time we will learn how to use these new capabilities and limit the downsides. But first, we will have to deal with the fallout of the fact that the finances do not add up.
Illustrations: Tulips, (via Wikimedia).
Also this week:
At Skeptical Inquirer, I go to this year’s Gathering 4 Gardner.
At the Plutopia podcast, we interview Tereza Pultarova, who reports on developing military technology in Ukraine.
Wendy M. Grossman is an award-winning journalist. Her Web site has an extensive archive of her books, articles, and music, and an archive of earlier columns in this series. She is a contributing editor for the Plutopia News Network podcast. Follow on Mastodon or Bluesky.