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Is Dot-AI the New Dot-com?

July 17, 2024

Navigating the intersection of innovation, regulation and valuation

A few weeks ago, when asked if he thought we were currently in an AI-driven market bubble, Bill Gates responded: “AI is no Pets.com,” referring to the dot-com bust poster-child startup of the early 2000s. And while I agree with him that AI is a very real technology that should be taken seriously, I can’t help but see parallels between the current environment and the boom/bust cycle of the internet era. 

Like the internet, AI has the power to fundamentally transform our socioeconomic landscape. And while AI isn’t a new concept, the recent and rapid adoption of Gen-AI chatbots has echoes of the browser wars of the late 1990s which paved the way for the internet to become the fabric of our society. The communications challenges, including making the complex simple, dealing with a constantly changing competitive landscape, regulatory uncertainty, managing investor sentiment and navigating the hype cycle, are also similar to those we faced back then. I started my career in those days and now, with 25 years of experience (and the gray hairs to prove it), I thought it might be worth exploring some of the lessons from the past in hopes they might help those who are navigating these challenges for the first time. 

You say you want a revolution

The dot-com boom transformed how we communicate, shop, and do business. Companies like Amazon, Google, and eBay emerged as giants, reshaping industries and creating new ones. Similarly, the AI boom is revolutionizing entire industries, from healthcare and finance to transportation and entertainment. Technology giants like OpenAI, Google and Microsoft are at the forefront, deploying AI technologies that promise to enhance productivity, improve decision-making, and solve some of humanity’s most pressing challenges. Today, every company, regardless of industry, is under pressure to develop and communicate their AI strategy.

For corporate communicators, the challenge lies in articulating the transformative impact of this technology  in a way that is accessible and compelling to diverse stakeholders. Just as dot-com companies needed to explain the potential of the internet to a skeptical public, today’s AI companies must demystify complex technologies and demonstrate their tangible benefits.

Into the unknown

Both booms have significantly impacted the workforce, albeit in different ways. The dot-com era led to job displacement in traditional sectors but it also saw the rise of new job categories as companies and governments moved to digitize their operations and the commercial internet democratized entrepreneurship. Similarly, while AI will certainly automate many routine tasks that will displace some workers, The World Economic Forum reports that “AI is expected to create new fields of work and lead to large expansion in others.”

Corporate communicators play a crucial role in managing this transition. It’s essential to address employees’ fears, uncertainties, and doubts by providing transparent information about how AI will impact their roles and the broader workforce. Engaging employees through continuous learning opportunities and reskilling programs can ease the transition, fostering a culture of innovation and adaptability.

Living in the wild, wild west

The regulatory landscape during the dot-com boom was often described as the “Wild West,” with minimal oversight and a rush to capitalize on new opportunities. The results of this laissez-faire attitude are being felt today as we deal with the societal impact of our hyper-connected world. Today, AI faces similar regulatory uncertainties. Governments and regulatory bodies are grappling with how to manage AI’s ethical implications, privacy concerns, and the potential existential threat of Artificial General Intelligence. In an open letter to mark the web’s 35th birthday, Tim Berners-Lee wrote: “the rapid advancement of AI has exacerbated concerns, proving that issues on the web are not isolated but rather deeply intertwined with emerging technologies.”

Building and maintaining trust is paramount. Corporate communicators must emphasize their company’s commitment to ethical AI development and transparent practices. This involves proactive engagement with regulators, participation in policy discussions, and adherence to emerging standards and guidelines. Demonstrating a responsible approach to AI deployment can help build public trust and mitigate regulatory risks.

Don’t believe the hype

Investor enthusiasm fueled the rapid growth of start-ups in the dot-com boom, often leading to inflated valuations and unrealistic expectations. The subsequent bust served as a harsh reminder of the need for sustainable growth and a return to fundamentals. The AI boom is experiencing a similarly frothy investor environment, as demonstrated by the record breaking valuations for tech giants as well as emerging start-ups.

Corporate communicators must balance the need to show growth and profitability with a commitment to corporate values. Providing clear, evidence-based updates on AI developments and applications is critical to building a narrative of steady and sustainable progress. This involves highlighting real-world case studies, showcasing customer success stories, and being honest about the limitations and ongoing challenges of AI technologies. Transparent reporting on progress and setbacks can also help manage investor expectations and build credibility.

Plus ça change…

More than a quarter century separates the dot-com boom from our current AI reality and there will certainly be many twists and turns to come. But, to quote Harry Truman: “The only thing new in the world is the history you do not know.” 

Originally posted on PRWeek on July 16, 2024.