Usually when talking about bubbles bursting its about a stock market bubble. P/E ratios now are approaching/passing the P/E ratios during the dot com boom/bust. Another reference point with high P/E ratios was around 1929-1930 (there are others too).

The dot com boom can be thought of as ecommerce which enabled investing in a lot of silly ideas at the time. A key technology that underpinned it all and won out was search. Every ecommerce site felt like they needed search, there were search engine companies, lots of competition across google, yahoo, etc.

An interesting lens to put on AI and the current stock market is that the software will be commoditized, its an eventuality. Its trending towards being able to run LLMs locally and get decent output. Decent is subjective but output similar to Q4 of 2025 models is when we started seeing more consistently usable output.

I believe that will a potential the inflection point for a bubble bursting the stock market: local or DIY LLMs producing "good enough" output and companies publicly backing away from enterprise contracts, lowering their AI spend if they can find cheaper ways to do it.