MongoDB CEO says if AI hype were the dotcom boom, it is 1996

Analysis It is 1996 in terms of the business adoption of AI if it were put on the dotcom era timeline, according to MongoDB CEO Dev Ittycheria.

Speaking to investors at a Goldman Sachs event earlier this week, the boss of the NoSQL database company argued the tech industry was still early in the rise of AI, a development which - we're all told - will transform business and enterprise technology.

"I believe that AI is not a question of if, but when. I view the world we're in today [compared with] circa 1996, maybe 1997. Netscape was just launched a couple of years earlier. People were excited about the web, but the web was still very basic, static web pages, and it wasn't that interesting. People [were] starting businesses on the internet, maybe Amazon, eBay and a few others, but you weren't seeing a plethora of companies exploding onto the market," he said.

"I think in some ways, we're kind of at the same stage with the AI era," Ittycheria said.

The CEO's view on the trajectory of the AI boom is not in line with that of other observers.

In its Hype Cycle for Emerging Technologies, 2024 edition, released last month, analyst company Gartner said GenAI is about to enter the dreaded "trough of disillusionment." Arun Chandrasekaran, Gartner distinguished VP analyst, told The Register at the time that expectations and hype around GenAI were "enormously high," but maintained it would have a "long term impact."

Meanwhile, ServiceNow chief financial officer Gina Mastantuono admitted last week there may be a spending bubble surrounding GenAI.

Enterprises are also struggling with the business case for GenAI projects more than a year after the boom started, global datacenter and colocation provider Equinix recently found.

MongoDB's Ittycheria told investors at the Goldman Sachs event there are three groups of use cases for GenAI at the moment: chatbots, research, and summarization and automation.

Quite where we are on the analogy with the dotcom boom and bust remains open to question. The CEO is correct in saying that as of 1996, Netscape Navigator - the browser which quickly dominated the nascent worldwide web - was a couple of years old, more or less. Amazon and eBay had also been formed in the previous two years.

Of course, the early dotcom era didn't end well. In early 2000, the Nasdaq Composite stock market index peaked after gaining 400 percent in the previous five years. It then went into a thundering crash, losing nearly two-thirds of its value in a year.

Whether we're heading for the same kind of crash, Ittycheria did not say. Still, he maintained people tend to "overestimate the impact of a new platform or technology in the short term but underestimate it in the long term."

Nonetheless, it could well be a bumpy ride, even if any dramatic changes for the worse are still five years off. In 2001, networking giant Cisco wrote off $2.2 billion in inventory owing to stalled spending during the dotcom crash.

If you're making the picks and shovels for the current AI gold rush, the tough call is going to be figuring out when to stop. ®