Every cycle has its word. Crypto. The metaverse. Pandemic-era everything. Today, it is AI.
Hype isn’t always wrong. The technology underneath is often real. The problem is price and timing. Hype prices in a future that hasn’t arrived yet, and the people who pay that price are usually the last ones in.
Five signs you are looking at hype
- The story moves faster than the revenue. The vision grows every quarter. The income doesn’t.
- Everyone uses the same word. When every pitch deck carries the same label, the label stops meaning anything.
- Urgency replaces evidence. “Get in before it’s too late” is not a reason. It is pressure.
- Nobody can explain how it makes money in one sentence. If the people inside can’t, you won’t be able to either.
- The valuation needs everything to go right. No room for a bad year, a new competitor, or a change in the rules.
What lasts instead
- Customers who pay, and keep paying.
- A business that would still make sense without the buzzword.
- Leaders who can survive a bad year.
- Debt that matches the cash actually coming in.
Today’s version
AI is real, and it is changing how business works. But there is a difference between a company using AI to serve its customers better and a company wearing the AI label to raise money. There is also a newer pattern worth watching: companies borrowing heavily to build capacity on the assumption that demand will arrive on schedule.
When a story needs debt to keep it going, watch the debt, not the story.
One question to ask
If you removed the buzzword from this pitch, would you still invest?
If the answer is yes, you may be looking at a real business. If the answer is no, you are looking at a story with a shelf life. Hype fades. Foundations don’t.
This essay shares a personal perspective. It is not financial or investment advice.
