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Peter Thiel's Warning: AI in 2024 Is the Internet in 1999. Buckle Up.

By Peter Thiel · Product & Building · 1 min read

AI will be massive. But as an investment? Peter Thiel says even Amazon dropped 95% before going up 25x.

Key Points

AI is transformative technology but treacherous as an investment
The internet parallel shows massive volatility before massive returns
Amazon went from $113 to $5 before going up 500x from the bottom
Being right about the technology doesn't mean being right about the timing

AI in 2024 is like the internet in 1999. It's correct as a technology but extremely bubbly and crazed as a sector to invest in.

Peter Thiel Thinks AI Is Real. And Dangerous to Invest In.

Peter Thiel doesn't doubt AI will transform society. The breakthroughs are real. The impact will be enormous.

But as an investment? He says it's treacherous. The word he uses twice. Treacherous.

Believing in the technology and believing in the investment are two very different things.

The 1999 Playbook Is Running Again

The internet in 1999 was obviously important. Everyone knew it. Big. Transformative. World-changing.

Then the dot-com bubble popped. Companies worth billions became worth nothing. Even the survivors got crushed.

As investments, AI is very very treacherous. The rough analogy: AI in 2024 is the internet in 1999.

The Amazon Rollercoaster Nobody Survived

Amazon was the obvious internet company. $113 per share in December 1999. By October 2001? Five dollars.

It didn't recover to 1999 levels until the end of 2009. A decade of patience. Then it went up 25x.

Amazon: $113 in 1999. Five dollars by 2001. First lost 95%. Then went up 25x.

The Math That Should Scare You

Buy Amazon in 1999, hold through everything: 25x return. Buy in October 2001 at the bottom: 500x return.

Being right about the technology was not enough. Timing was everything. Thiel suspects AI will follow the same brutal pattern.

25x from 1999. 500x from the 2001 bottom. My suspicion is that's roughly where we are in AI.