At a recent press conference following Federal Reserve policy deliberations, Chairman Jerome Powell made a key distinction between the current artificial-intelligence surge and the late-1990s dot-com bubble. He stated that the difference lies in substance: today’s high-valuation AI firms “actually have earnings and stuff like that,” contrasting with many dot-com era companies that lacked viable business models.
Powell further emphasised that the AI wave is not just speculative hype, but is already acting as a meaningful driver of economic growth. He noted that spending on compute infrastructure, data-centres, specialised chips and software puts AI in a different category — one that is helping boost productivity and output across sectors.
While he acknowledged that not every firm or project will succeed, Powell appeared confident that the broader ecosystem is grounded in real value creation. He said that because many of these companies have earnings and capital investments with tangible infrastructure behind them, the risk is different from the speculative over-valuation issues of the dot-com era.
