On January 27, 2025, Nvidia experienced its largest single-day market value drop of 17%, wiping out approximately $600 billion, setting a record for the largest single-day market value loss by a single company in U.S. stock market history. The trigger for this plunge was the release of a low-cost, open-source large model, DeepSeek-R1, by the Chinese company DeepSeek. In 2023, Nvidia's stock soared by 239%, followed by another 171% increase in 2024. The rocket-like rise in its stock price had already caused some investors to question whether its valuation had reached a peak. Satya Nadella, CEO of Microsoft, a major supporter of OpenAI, recently expressed concerns in an interview: "If current AI companies cannot deliver real GDP growth and if there is no genuine demand to support the products they develop, they will eventually collapse and disappear." Is the current AI market frenzy and soaring stock prices based on the company's real fundamentals, or is it driven by irrational exuberance? This epic single-day drop evokes memories of the dot-com bubble 25 years ago. Back then, when the Nasdaq index reached a historic high of 5,048 points in March 2000, Wall Street similarly failed to foresee that the internet revolution, symbolized by ".com," would evaporate $6.5 trillion in market value within two years, causing Amazon's stock price to plummet by 90% and Sina's by more than 98%. Today, DeepSeek, as a representative of Chinese enterprises, not only intensifies global technological competition with its potential in technological breakthroughs and cost control but also prompts a deeper reflection on the valuation bubble in the AI industry.

Does a technological revolution inevitably come with a capital bubble? After the bubble bursts, which companies can survive the cycle? Despite being 25 years apart, these two waves present profound mirrors and divergences in terms of market scale and corporate survival logic. This article aims to deeply analyze the inevitability and significant role of capital bubbles in technological revolutions by comparing the internet bubble 25 years ago with the current AI investment frenzy. It also explores whether the AI era faces similar risks of decline and what corporate characteristics can help institutions navigate through cycles. As Chinese companies rapidly rise in the global AI race and continue to expand their global influence, this technological competition is shifting from the monopoly of Silicon Valley unicorns to a diversified competitive ecosystem distinct from the internet era.

The ".com" Era