AI Boom Risks Another Wall Street Bubble

Small investors could again face heavy losses if the artificial intelligence boom collapses, Charles Gasparino argues in a New York Post column published Oct. 17, 2026. He compares today’s AI sales pitch to the dot-com frenzy, when investors heard that new technology could make them rich and companies without profits were promoted as investments that could defy common sense and gravity.

The Sales Machine and the Small Investor

Gasparino recalls that the internet boom was sold as a “new paradigm,” a phrase he uses to describe irrational exuberance: emotion, not metrics, drove valuations. Some companies had what he calls “outright insane” business models; most others were simply overvalued. A few showed real promise. But promise didn’t shield them from the correction.

The losses spread across the market. Gasparino writes that they were staggering, a generation of investors took a beating, and the technology market needed years to recover. The crash swept up speculative companies such as Pets.com, which promoters had presented as a possible next Microsoft, along with Microsoft and nearly any public company tied to the internet business. Small investors lost everything.

That history matters as investors size up AI. Gasparino says many people investing today either don’t remember the dot-com era or aren’t aware of it. The pitch sounds familiar, he writes: groundbreaking technology, plus the promise that all investors can get rich. AI may eventually deliver, he says, but the road could be long and messy.

Who’s Taking Profits—and Who’s Being Sold the Story

Gasparino points to hedge funds and institutions that do their own research, rather than relying on financial television promoters, as the likeliest source of current concern. Those investors sense, he writes, that something isn’t right with AI, the data and Wall Street’s sales machine. They’ve started taking profits.

The divide is clear in the column: institutions with their own research are moving to protect gains, while smaller investors may be entering a market whose risks many don’t recognize. Gasparino doesn’t name a community response, mutual aid effort or horizontal organizing around the coming losses. His remedy is individual: take profits, avoid greed, or hope the AI company you back survives a crash.

Recent market moves have sharpened the question. Rates rose after a bad inflation report, and AI stocks sold off. Gasparino says he can’t tell whether that was the market’s final statement on AI. The sales pitch may return, he says. More enthusiasm could still arrive.

Another Round of Hype, Another Bill

Initial public offerings by hyperscalers such as Anthropic and possibly OpenAI could arrive in the coming weeks and months, Gasparino writes. Their arrival may spark another burst of investor enthusiasm, even as he warns that the technology’s path could be uneven and a market reversal remains hard to predict.

He argues that interest rates will rise because AI competes with the federal government’s substantial borrowing needs. He also predicts a correction for AI and for companies adopting the technology through heavy spending, much of it funded by debt. The column’s warning isn’t that every AI company lacks promise; it’s that hype, borrowing and valuations can outrun what businesses can deliver. In the last bubble, ordinary investors paid for that gap.