The capitalist crises—from the internet click baits of the dot-com booms and bursts to the data and codes of the current AI bubble—are not merely manifestations of a Kondratiev cycle of expansion, stagnation, and recession. These capitalist boom, burst and crisis must be understood as part of the global capitalist system’s relentless drive to reinvent and rebuild itself in order to hide its systemic failures and sustain a mode of reproduction grounded in exploitation. The dot-com bubbles gave rise to new forms of technological and digital mechanisms of credit-led growth—from fintech innovations to internet-based finance—that revolutionised banking, trade, and a wide range of services.
The service sector experienced unprecedented expansion, which not only revitalised crisis ridden post–Second World War capitalism but also deepened the erosion of working conditions and labour’s role in the real production of essential goods and services. This ultimately led to the collapse of dot-com capitalism driven by the internet economy. Similarly, the ongoing AI bubble reveals familiar patterns of speculative boom and inevitable burst. Both phases of capitalist expansion were built on betting against the working class and the commodification of their creative labour. Despite technological transformations, capitalism continues to suffer recurring crises—from the dot-com era to the present AI-driven economy. No web, code, or algorithm can conceal the perpetual hype capitalism generates to obscure its inherent contradictions, crisis and failures.
The recently published report The GenAI Divide: State of AI in Business 2025 by MIT’s NANDA initiative reveals that despite an investment of $30–40 billion in generative AI, only 5% of integrated AI pilots are generating significant value, while 95% of organisations report zero return on their investments. This pattern of overinvestment and minimal returns reflects the falling rate of profit that continues to be at the core of capitalism’s recurring crises. There is no substantial evidence that generative AI enhances the productive or creative capacities of labour in the way previous technological developments have contributed to capitalist productivist culture and economic growth. While the report attributes these failures to poor implementation strategies, the deeper question remains: why have organisations that have successfully adopted and implemented AI platforms still failed to achieve higher revenues?
However, American private investment in AI is projected to reach $109.1 billion in 2025, while foreign investors have poured a record $290 billion into U.S. stocks. As a result, the stock values of U.S. AI companies are surging throughout 2025. Businesses are channeling funds into AI to diversify income streams and mitigate risks, while the U.S. continues to consolidate AI-driven foreign investments, which now account for nearly 30% of the global market share. Yet, such massive investments in generative AI have not translated into higher productivity, more employment, or higer wages. Capital investment in AI is now roughly seventeen times greater than that of the dot-com bubble, suggesting that the current AI boom may be heading toward a similar collapse—just as the dot-com boom imploded twenty-five years ago.
Historically, the speculative nature of bubbles and bursts is inherent to the capitalist system, which manufactures crises by betting on products and services far beyond their real value as reflected in prices. From the Dutch Tulip Bulb market bubble—known as Tulipmania—in the 17th century to the dot-com boom and crash, four hundred years of history reveals the fictitious character of prices under capitalism and its system, which obscures the real value of goods and services derived from labour time and creativity of the working people. The current AI bubble embodies the same speculative tendencies and structural contradictions that have defined every major capitalist crisis in history. It, too, is waiting to burst.
From clickbait capitalism to codified techno-feudal platform capitalism, each phase is marked by bubbles destined to collapse—driven by the ongoing processes and systems that deny labour the value of its creative power and technological innovation. The disempowerment of labour, evident from the era of internet capitalism to the rise of AI-driven capitalism, persists within the broader narrative of the capitalist bubble continuum. The priests of capitalism continue to acknowledge its crises, yet they externalise the causes—blaming external forces rather than confronting the internal contradictions necessary to sustain the capitalist system itself.
Generative AI is a product of labour and continues to rely on data derived from the everyday lives of people. It transforms this data into codes and machine languages through models built on linear algebra, probability, statistics, and calculus—tools that enable pattern recognition, prediction, and the generation of new content through statistical analysis of existing inputs. This process involves both manual and mental labour, making living labour central to the development and expansion of generative AI. Yet, GenAI companies and their broader capitalist culture continue to control and devalue the very labour that sustains them. As a result, the GenAI bubble cannot endure solely on massive capital investment. Its long-term viability depends on recognising labour’s essential contribution and transforming the anti-labour narratives that define the technology sector—by improving working conditions there and across the wider economy and society.
Happy, healthy, and free labour alone can create the conditions for the creative and productive power of any economic system that aspires to be free from exploitation and inequality. Generative AI holds both essentialist and emancipatory potential for labour—but only when it is liberated from capitalism in all its forms, including its technological manifestations. Capitalism, rooted in structural inequality and exploitation, cannot provide the fair conditions necessary for such emancipation and therefore can never serve as a true alternative. GenAI must be freed from capitalist control, and labour must reclaim ownership over it—since every stage of its creation, from data input to coding and language modeling, is powered by the creative capacities of workers. GenAI should not only empower labour and transform its working conditions but also be collectively governed by working people, ensuring that its democratic ownership, control, and benefits are distributed equitably—according to the skills, knowledge traditions, productive capacities, and needs of the working people across the world.
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*Academic based in UK
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