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BT Ben Thompson Ben Thompson Writes Stratechery, a subscription newsletter analyzing the business strategy behind tech and media companies, and has built a reputation for framing how platfo...

“I think it's inevitable that we are right now, will be whatever, sort of in a bubble, and it's going to pop and it's going to be painful. And then we'll come back. That's just the inevitable nature of these things. I think there is an extent to which AI is different in lots of areas. The sort of mechanics of stuff piling in too quickly, there being a mismatch in timing between when it's absorbed or not. Like there's lots of differences that we've talked about between the dot-com era and this era. But that dynamic, I think, where dot-com had lots of good ideas, just didn't make sense for a while or didn't sort of get penetration for a while. I think that is almost inevitably going to be the case.”

Sharp Tech with Ben Thompson · Tech Strategy & Big Tech · October 2026

“I think it's inevitable that we are right now, will be whatever, sort of in a bubble, and it's going to pop and it's going to be painful. And then we'll come back. That's just the inevitable nature of these things. I think there is an extent to which AI is different in lots of areas. The sort of mechanics of stuff piling in too quickly, there being a mismatch in timing between when it's absorbed or not. Like there's lots of differences that we've talked about between the dot-com era and this era. But that dynamic, I think, where dot-com had lots of good ideas, just didn't make sense for a while or didn't sort of get penetration for a while. I think that is almost inevitably going to be the case.” — Ben Thompson, Sharp Tech with Ben Thompson

Context

Early in the episode, Thompson is asked about an AI bubble. He gives his view that a painful pop is inevitable, while granting that this era differs from the dot-com era in several ways. He says he doesn't know when it will happen and points to financing, including trouble for the newer AI cloud companies, as the gate.

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Transcript

Sharp Tech with Ben Thompson Around 07:18 into the episode
Ben Thompson

I don't know. I mean, so there's no question. No, there is a question.

Andrew Sharp

Okay.

Ben Thompson

I think it's inevitable that we are right now, will be whatever, sort of in a bubble, and it's going to pop and it's going to be painful. And then we'll come back. That's just the inevitable nature of these things. I think there is an extent to which AI is different in lots of areas. The sort of mechanics of stuff piling in too quickly, there being a mismatch in timing between when it's absorbed or not. Like there's lots of differences that we've talked about between the dot-com era and this era. But that dynamic, I think, where dot-com had lots of good ideas, just didn't make sense for a while or didn't sort of get penetration for a while. I think that is almost inevitably going to be the case. Now, when does that happen? I don't know. I mean, you have all the, there's been a lot of issues with the Neo scalers, Neo, NeoClouds. Neo clouds, yeah. Right. Can they get financing? All of which goes back to, I think Trotectary was pretty on the ball with this. We've been talking about the concern about the credit mismatch, not like just, are we going to run out of money? This is when we had the discussion about railroads. We had, you know, we talked about Google. I know we're going to get more into some of the financing questions sort of later on, but I think it is likely there's going to be pain. But so financing is the

Andrew Sharp

gate and people will experience pain. So my experience reading your coverage of the S1 this week, though, was turns out Anthropic's actually like a rock-solid business.

Ben Thompson

So yes, you're totally right. Like the core business looks amazing. The subscription for sure is profitable. It's less profitable than the API, but the subscription is a great product. People are a lot like they've already paid for it, so they're going to use it. They're going to get used to your…

Andrew Sharp

clawed people. That's right. Exactly. So once

Speaker names come from our own diarization. The position is estimated from where the line sits in the episode.

More from Sharp Tech with Ben Thompson

“About 50% of their revenue is coming from the big three via those services. So it's coming through AWS, coming through Azure, coming through Google. And it is confirmed that they're doing kind of sketchy accounting, depends how you want to define it, which is if you pay Amazon $100, that … Anthropic is recording that $100 as revenue. Anthropic revenue. And then in reality, like 30, a third of that or so depends, it sort of varies. I think people were saying about 37% goes to the provider, the platform provider, the AWS, the Azure, the Google.” — Ben Thompson, Sharp Tech with Ben Thompson “How do you improve the top line? Multiplying humans, right? There's this difference between multiplying versus replacing. And when you're multiplying humans, you're basically creating entirely new things to do, new workflows, new opportunities. The challenge for this whole trade in general is that usually number one takes longer. And number two, usually comes from new companies that they come in, they disrupt the incumbents by virtue of the AI first company taking on the old school SaaS company. The SaaS company is trying to shove AI and use it as much as they can, but they're just fundamentally not constructed properly to do it. And so, in the fullness of time, those companies go away. The AI native companies take their place, and that's how AI takes over the world. I think there's a very decent chance that that's how it happens. The problem is it takes a long time. And timing is the issue.” — Ben Thompson, Sharp Tech with Ben Thompson