The once-deafening roar of AGI hype is fading into a nervous whisper. What went wrong, who’s hurting, and what happens next?
Remember when every headline screamed that ChatGPT would end work as we know it? Two years later, the same voices are quietly updating their LinkedIn profiles. The AI hype bubble isn’t just leaking—it’s deflating in real time. Let’s unpack why the promises cracked, who got burned, and what a saner AI future might actually look like.
The Rocket Ride Up
Between late 2022 and mid-2023, AI felt like a rocket with no ceiling. Tech CEOs spoke of artificial general intelligence arriving within months. Venture capitalists flung checks at any startup with a .ai domain. Headlines declared radiologists, coders, and even novelists obsolete. The AI hype bubble was in full swing, and skepticism was labeled Luddite thinking. Social media feeds turned into daily parades of jaw-dropping demos—AI writing code, composing symphonies, and diagnosing cancer. Each new release felt like a leap toward the singularity. Investors poured billions into companies promising to automate entire industries overnight. The message was clear: adapt or be left behind.
The First Cracks Appear
By early 2024, the cracks started to show. GPT-4’s much-hyped reasoning plateaued. Autonomous driving missed another deadline. Startups built on vaporware began folding. The AI hype bubble wobbled. Job boards thawed; recruiters who froze hiring in 2023 quietly reopened reqs. Developers who feared obsolescence realized AI still needed them to debug its hallucinations. Venture capitalists started asking for revenue instead of runway. The narrative shifted from revolution to evolution. Media coverage turned from breathless to skeptical. The public began to question the timeline and the promises. The industry faced a credibility crisis.
Who Gets Hurt
The fallout isn’t evenly distributed. Junior copywriters laid off in 2023 still struggle to find roles that pay half their old salary. Startup founders who mortgaged houses to chase AGI dreams now host sober Twitter Spaces about runway. Investors who bought peak-hype tokens watch portfolios shrink. Yet established tech giants quietly sigh in relief—regulators ease off, and talent flows back to stable salaries. The AI hype bubble burst hurts dreamers more than incumbents. Freelancers who pivoted too hard into AI tools find themselves competing with cheaper overseas labor. University students who switched majors to AI ethics now question the job market. The industry faces a reckoning with its own narratives.
What Sanity Looks Like
A post-hype AI landscape could be healthier. Funding flows to narrow, useful tools instead of moonshots. Regulation catches up without knee-jerk bans. Workers upskill rather than panic. The AI hype bubble deflates, but real progress continues—just slower, steadier, and more honest. The question isn’t whether AI will change the world, but whether we’ll let marketing departments write the timeline. Sanity means celebrating incremental wins instead of waiting for messianic breakthroughs. It means building tools that solve real problems today, not hypothetical ones tomorrow. The future belongs to builders who underpromise and overdeliver.
